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Gold investing has been a popular choice for many in recent years, hitting its highest point in more than a decade last September. Thanks to an ability to hedge against inflation (by maintaining its value as other assets falter) and diversify portfolios (providing a buffer that other assets cannot), many have turned to gold in its various forms.
While knowing which asset to invest in is critical, it’s equally important to know when to get started and when to look elsewhere. And with the price of gold surging to numerous price records so far in 2024, investors may have already missed some rare opportunities to turn a quick profit with an investment often known as a safe haven.
But that window of opportunity hasn’t quite closed yet, either. There are multiple reasons why beginners should consider investing in the metal as soon as this week. Below, we’ll break down three of the most important ones to know now.
See what gold investment is best for you here today.
3 reasons to invest in gold this week
Not sure if now is the right time to invest in gold? Here are three reasons why you should consider doing so this week.
The price has dropped
Gold has shattered numerous price records this year, the latest of which occurred on July 17 when the metal hit $2,472.46 per ounce. But it’s dropped by 3% since, currently sitting at $2,389.26 for the same amount of gold.
And while that drop is minimal, it’s better than waiting for the price to rise even further. With many experts predicting a price of $3,000 per ounce shortly, then, now is the time to buy in while it’s still affordable. If you wait, you could miss out on the portfolio protection a gold investment can provide. And the price could rise within days.
Find out what your gold investment could cost here.
The price could change after the Federal Reserve meeting
The next Federal Reserve meeting is slated for July 30 and July 31 (Wednesday and Thursday this week). While a reduction in the federal funds rate doesn’t seem likely, the Fed is likely to give greater insight into their decision-making process and the chances of a rate cut to come in September when they meet again.
While the Fed doesn’t directly dictate the price of gold, it could influence it, particularly if higher interest rates for longer lead to further economic concern. In this scenario, more investors may turn to gold for protection, causing the price to rise. But if the meeting ends on a positive note, the price of gold could adjust downward in response. So investors should consider investing before that happens if they think the price will rise – or wait until later in the week if they think the price will fall further.
Your portfolio isn’t diversified enough
A changing inflation rate and what many expect to soon be a lower interest rate climate may soon combine to affect your portfolio, perhaps significantly. In times like these, diversification is particularly important to get right. A diversified portfolio can help take advantage of some volatility, such as those offered by stocks and bonds, while still offering some protection against larger economic concerns.
Gold can adequately perform the latter function, especially if it’s done in the form of 10% or less of your overall portfolio. And with changes expected as soon as this week (remember that the Fed doesn’t need to formally adjust rates for lenders to do so), now is a great time to add the protection and diversification a gold investment can provide.
The bottom line
While investors may have been able to get started with gold at a lower price point if they had acted last year, there may still be an opening to get started with the metal this week. Thanks to a declining price point, the potential for that price to fall further post-Federal Reserve meeting and the increasing need for a diversified portfolio ahead of a changing economic climate, this week marks a smart time to consider the alternative asset. Just be sure to weigh the pros and cons before getting started to ensure that this unique investment is right for your unique portfolio and financial circumstances.
Additional Insight:
Consider the Long-Term Trends
When investing in gold, it’s essential to consider long-term trends rather than focusing solely on short-term fluctuations. Gold has historically been a reliable hedge against economic uncertainty and inflation, making it a valuable addition to a diversified portfolio.
Geopolitical Factors
Geopolitical events, such as trade tensions or political instability, can impact the price of gold. As global uncertainties rise, investors often turn to gold as a safe haven asset, driving up its value. Keeping an eye on geopolitical developments can provide valuable insights for gold investment decisions.
Alternative Gold Investments
Aside from physical gold, investors also have the option to invest in gold mining stocks, ETFs, or mutual funds. These alternatives can offer exposure to the gold market without the need for physical ownership. However, each investment option comes with its own set of risks and considerations.
