Are gold bars and coins a good investment in 2024? Here's what experts think
Consumers have flocked to gold investments over the last year, largely thanks to inflation, geopolitical tensions and economic instability. There's more than one way to invest in gold, though. Investors can open a gold IRA, buy shares in gold stocks, or, as many consumers have lately, go the traditional route and buy gold bars and coins.
Are you also considering buying gold bars or coins in 2024? Below, we'll break down when buying physical gold bars and coins might be a good move, according to experts.
Start by reviewing your gold investing options here to learn more.
Are gold bars and coins a good investment in 2024?
Here a few ways to determine if gold bars and coins will be a worthwhile investment for you this year.
You want something tangible that's always in demand
One of the biggest benefits of buying physical gold is that, unlike stocks, bonds, or mutual funds, it's tangible. You can hold it in your hands — see it and feel it for yourself.
"It can provide a sense of ownership and security," says Sankar Sharma, investing educator and CEO of RiskRewardReturn.com.
Physical gold is also scarce and in high demand worldwide. As such, it can be bought and sold fairly easily — a nice perk if you need to retain liquidity or have access to fast cash in a bind.
"Gold continues to be in limited supply and there is growing demand from all over the world," says Alex Ebkarian, co-founder of Allegiance Gold. "Members of the BRICS countries — Brazil, Russia, India, China, and South Africa — are still considering forming a single currency backed by gold, increasing its demand."
Learn more about investing in tangible, physical gold here now.
You want protection from inflation, recession or political turmoil
A key reason gold investments have surged lately is inflation. The precious metal has long been touted as a smart hedge against inflation, allowing investors to retain their wealth even while local currencies lose value. As Ebkarian explains, "Gold is not tied to any specific currency. It protects your portfolio against dollar devaluation and fluctuations in exchange rates."
It's also considered a safe haven asset and can help protect your money in times of geopolitical tension or during shifts in political leaders or policies. This is because physical gold is, again, tangible, which "minimizes counterparty risks," says Collin Plume, founder of Noble Gold Investments.
"In other words, physical gold investors are not reliant on the financial health or performance of a third party, such as a bank or a mining company, for their investment to accrue value," Plume says.
Recent gold prices back up Plume's sentiments. In early October, gold cost roughly $1,800 per ounce. Today, it's over $2,000 per ounce and it could go higher.
You plan to keep it for the long haul
Finally, buying physical gold bars and coins might be wise if you plan to hold onto it for a while. Unlike stocks and many other investments, it generally won't deliver much in short-term returns. Instead, it's better used as a long-term investment — one that can store your wealth and potentially grow it over a period of many years.
"Physical gold is a mid- to long-term investment," Ebkarian says. "It's not for day trading."
Just be prepared to ride out any waves. In the early 2010s, for instance, gold prices dropped considerably and held there for years. They've since recovered — and then some — so investors who held onto their investments during that downturn could see considerable returns at today's prices. "Gold's track record over the long-term is impressive," Ebkarian says.
Understand the downsides
While buying physical gold can be smart in some cases, it's not right for everyone — and it has its downsides, too. For one, you'll need to secure storage for it, which could mean a hefty annual fee.
"Physical investments in gold have additional complications," says Carla Adams, founder of Ametrine Wealth. "You have to find a safe place to store the gold — which, for many, means paying for the storage of the gold. You'll also want to purchase insurance on the gold."
There's also the risk of buying counterfeit gold if you're not careful where you buy it and there could be pricey dealer markups as well.
"The cost of buying physical gold can be expensive," says Matt Dmytryszyn, chief investment officer at investment advisory firm Telemus. "Depending on the size of the investment, you have to safely transport and store the commodity. There are also transaction costs to purchase and sell the gold."
Alternatives to gold bars and coins
If you're interested in investing in gold in 2024, there are many ways to go about it. Rather than buying gold bars and coins and holding them yourself, you could open a gold IRA — a type of retirement account that lets you buy physical gold and precious metals to grow your nest egg.
You can also invest in gold mining stocks, futures or ETFs, which are traded on major stock exchanges. Ebkarian says gold ETFs are a good option for investors who want exposure to gold but not the hassle or fees of storing it.
"Gold stocks, ETFs, and futures would be my top three choices going into 2024," says Carlos Dias Jr., a financial advisor at Dias Wealth. "Gold stocks and ETFs can pay dividends, while futures can potentially provide the liquidity that an investor is seeking."
Whatever you do, Dias says be careful not to over-invest in gold. While gold can make for a good diversifier, you usually don't want more than 5% to 10% of your portfolio invested in it.
Think of it "as small, strategic seasoning, not the main course," Dias says. "Focus on building a well-rounded, diversified portfolio that can weather any storm. That's the recipe for true financial security."
