Gold prices just shattered another record: 3 big reasons to buy in now
The gold market has been on a wild ride since the start of 2024, with gold prices breaking numerous records and capturing the attention of investors. The trend started in March, when gold prices surged to a new high of $2,160 per ounce — up 8% from the previous price record set in December 2023. The bull run continued into the following month, with gold hitting another milestone of $2,259.29 per ounce on April 1. Late May saw another peak as gold prices soared to $2,439.98 per ounce.
After a brief period of stabilization, gold is again making headlines due to its upward price trajectory. This week, the price of gold has been teetering on a new all-time high — and on July 17, the price per ounce climbed to $2,472.46, shattering yet another record and helping to solidify gold's status as a formidable asset in the current economic landscape.
While it may seem counterintuitive to buy gold at a record-high price, you may want to consider buying in right now. After all, gold investing still holds significant potential in today's landscape. Here's why.
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Gold prices just shattered another record: 3 big reasons to buy in now
Here are a few reasons why you might want to consider buying into gold now.
To capitalize on the potential for further price appreciation
While gold prices have already reached several record highs this year, some experts believe there is still room for growth. Several factors support this outlook. For starters, many central banks have been increasing their gold reserves. Unlike fiat currencies, which can be printed at will, the global gold supply is finite. So, as demand for the precious metal continues to grow, the limited supply could drive prices even higher.
The use of gold in various industries, including electronics and healthcare, is also expanding. As new applications for gold are discovered and implemented, industrial demand could further boost prices. So while the price is high now, there's still potential for future growth — and by buying in now, you may be able to capitalize on any price growth that occurs over time.
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To hedge against economic uncertainty
While inflationary pressures have been cooling recently, the global economy continues to face numerous challenges, including ongoing geopolitical tensions. That makes gold a wise choice for investors, as the precious metal has long been regarded as a reliable hedge against economic uncertainty. Its role in this capacity is multifaceted.
For starters, gold tends to maintain its purchasing power over long periods due to the inherent value it holds. While traditional currencies can lose value due to inflation or other economic issues, gold can act as a hedge against that type of currency risk. That's because, as the value of a currency declines, the price of gold typically rises, preserving wealth for investors holding gold.
During periods of severe economic stress or geopolitical turmoil, gold often experiences increased demand by investors seeking safe haven assets. This tendency can lead to price appreciation when other assets may be declining in value. Plus, gold is highly liquid and can be easily converted to cash. This liquidity provides investors with financial flexibility during uncertain economic times.
For the diversification benefits it offers
Diversification is a cornerstone of sound investment strategy, and gold offers unique diversification benefits that can significantly enhance a portfolio's resilience and performance. That's due, in large part, to how gold typically has a low or negative correlation with stocks and bonds.
When traditional assets decline in value, gold often moves in the opposite direction or remains stable. So, by including gold in a diversified portfolio, you can potentially reduce your overall portfolio volatility, protecting yourself from future losses if or when market volatility increases.
The bottom line
While the current record-high gold prices may give some investors pause, it's important to consider the broader context and potential benefits of including gold in an investment portfolio. The ongoing economic uncertainties, need for diversification, potential for further price appreciation and geopolitical risks all contribute to gold's appeal as an investment option right now.
However, as with any investment decision, it's crucial to carefully consider your individual financial goals, risk tolerance and overall investment strategy before buying in. But for investors seeking stability, diversification, and potential growth in an increasingly uncertain world, gold remains a compelling option worth serious consideration, especially given its recent upward trajectory in price — and the likelihood for future growth.
