Are gold bars and coins a good investment right now?

It's important to have a diverse mix of investments in your portfolio, whether you're a seasoned investor or are just starting out. If you're too heavily invested in risky stocks, you could see your portfolio's value dwindle quickly if the market takes a downturn. And, one way to achieve a good mix of investments is by adding gold to your portfolio.

Gold has always had a certain allure for investors. Throughout history, it has been regarded as a symbol of wealth, a safe haven during economic uncertainty and a tangible asset with intrinsic value. And while there are numerous ways to invest in gold, physical gold — like gold bars and coins — offers a few unique benefits to investors. 

However, like any investment, the decision to invest in gold bars and coins requires careful consideration in any economic landscape. So is this a good time to invest in gold bars and coins? For many investors, that answer is yes.

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Are gold bars and coins a good investment right now?

Investing in gold bars and coins can make sense right now for a few different reasons, including:

Inflation concerns

Inflationary pressures have been a significant concern recently. While inflation appeared to be cooling over the last few months, the inflation rate ticked back up by 3.2% in July — and it's unclear where it could be headed in the coming months. 

And, that's one area where gold investing can offer value right now. Gold has historically been viewed as a hedge against inflation, as its value tends to rise during times of increased consumer prices. That's especially true for physical gold, like gold bars and coins, as many investors like to have the tangible asset. 

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Geopolitical tensions 

Geopolitical tensions and worldwide economic uncertainty can drive investors toward safe-haven assets like gold. Any uptick in global instability could potentially lead to an increase in gold's demand and price. 

For example, over the last four decades, the price of gold climbed upward during six of the eight large stock market crashes. And, during the 2007-2009 recession, the S&P 500 index declined by nearly 60%. However, physical gold prices increased during that same time by nearly 26% — moving in the opposite direction because of an uptick in demand by investors. 

And, considering that there are a number of geopolitical tensions occurring currently, it's a good time to consider investing in gold bars and coins or other precious metals. 

Economic uncertainty

Physical gold has also stood the test of time as a store of value. During periods of economic uncertainty, like we're experiencing right now, gold tends to act as a safe haven — and can help temper the risk from other investments in your portfolio.

For example, stocks tend to be highly volatile in a tumultuous economy. While these market fluctuations may cause stocks to drastically increase in value in a matter of minutes or hours, they can also cause the value of stocks to nose dive, causing massive portfolio losses. But by adding gold to your portfolio, you can minimize the risk while maximizing the potential returns. 

And that's not the only reason to add gold bars or coins to your portfolio right now. Gold bars and coins are highly liquid assets, so you should have no issue selling them when and if you decide to. That can be useful right now if you need to free up cash.

Recent price drop

Gold prices have declined recently, hitting a five-month low in the last couple of weeks. The spot price of physical gold is now under the $1,900 threshold — but don't let that deter you. Short-term price volatility is normal with gold, but the precious metal tends to hold value over the long term.

Last year, the price of gold was about $1,700 per ounce — and even at its current price of under $1,900 an ounce, it's still up substantially compared to 2022. And, gold tends to perform like this year after year. So, if you buy in now, while the price is low, you may see significant increases in value over time.

The bottom line

Investing in gold bars and coins right now can make sense for many investors, particularly those seeking to diversify their portfolios and hedge against inflation and economic uncertainty. Gold's historical resilience and its potential to act as a safe haven during uncertain times are also appealing aspects — especially right now. However, like any investment, it's crucial to assess your individual financial goals and risk tolerance before making a decision.