Is gold still a good investment heading into 2024?
There were clear advantages to saving in 2023 and obvious disadvantages to borrowing.
Thanks to nagging inflation and the Federal Reserve's attempts to rein it in with higher interest rates, borrowing costs for millions of Americans skyrocketed. At the same time, savers saw significant returns on their money, especially if they deposited it into a high-yield savings or certificate of deposit (CD) account. So it was clear what financial moves to make and what to avoid.
But what about investing? That's always a tricky question, particularly in the economic climate of 2023. Against this backdrop, many have turned to precious metals, and specifically gold. Gold investing hit an 11-year high earlier this year for multiple reasons. So, with a new year on the horizon and a changing economy to account for, is gold still a good investment heading into 2024? Or should you look to put your money elsewhere?
Start by reviewing your gold investing options here to learn more about this unique opportunity.
Is gold still a good investment heading into 2024?
Here are three reasons why gold — in its myriad forms — can still be a valuable investment as we get into 2024.
Inflation is still persistent
Inflation has certainly come down significantly from the 40-year high it hit in June 2022. But it's still above the Federal Reserve's 2% target goal. As such, interest rates could go higher, but will likely remain at least where they are for the foreseeable future. Fortunately, gold can help in times like these.
Known for its hedge against inflation, gold often maintains its value during inflationary periods, and is even known to tick up in price when other assets are hurt by inflation. So it's likely worth putting a portion of your portfolio into gold — both to help with today's cooling but still present inflation and to provide a buffer for future economic headwinds.
Learn more about how gold can help with inflation here.
The price is rising
If you're looking for an investment that's increasing in value, then gold may be an option for you. The price of gold today, December 5, 2023, is $2,025.74 per ounce. That's up 11% from the $1,821.35 price point the precious metal sold for in early October. And, if history is an indicator, it could be heading up further in the months and years to come.
That said, gold is not generally considered to be an income-producing asset in the same way that stocks, bonds and real estate are. So while it can pay to get in now before prices rise further, your ability to generate income or make a substantial return is unlikely to come in the short term.
It can diversify your portfolio
Gold is a great way to diversify a portfolio that's otherwise made up entirely of stocks and bonds. A gold investment can offset losses felt in those asset classes by maintaining its value when those others appear shaky. But the right amount to invest — and the type of gold you invest in — will vary based on your experience, investment horizon and other personal factors. Most experts recommend limiting it to just 10% of your overall portfolio, but you may keep an even smaller amount, depending on your investor profile.
Speak to a gold investing expert here to determine which makes sense for you.
The bottom line
Gold has been a worthwhile investment for many in 2023, but that worth won't immediately vanish once the calendar turns to 2024. In fact, gold can still be valuable in the new year, too. Thanks to the buffer it can provide against inflation (today's and that yet to come) and a rising price, gold is still worth investing in for many heading into 2024. And it can provide the diversification for your portfolio that other asset classes simply cannot. For these three reasons, gold can still be a good investment come January for many people.
