Is it too late to invest in 1-ounce gold bars? 5 reasons to buy in now
Gold has experienced a rapid price ascension over the last few months, helping to drive renewed interest in the investment asset. For starters, the price of gold hit a new record high of over $2,400 per ounce on May 20, up by about 14% from late March when the price of gold was nearing $2,100 per ounce. And, the price of gold hit several other milestones in the months prior, which further helped to keep investors' eyes locked on the precious metal.
The recent price surge has been driven, in large part, by the current economic landscape, which is dotted by issues with inflation, geopolitical strife and high interest rates. These types of economic issues tend to negatively impact more volatile assets, like stocks, so many investors will turn to alternative assets, like gold, to help preserve their wealth. And, as they do, the price of gold tends to surge in tandem.
Given gold's price ascent, you may be considering whether it makes sense to follow suit and add 1-ounce gold bars to your portfolio. After all, these compact and accessible gold investments are a popular way to enter the precious metals market. But with gold prices as high as they are, you may also be wondering whether you've missed the opportunity to buy in. Below, we'll break down why it's not too late to get invested.
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Is it too late to invest in 1-ounce gold bars?
Given today's elevated gold prices, it would make sense to be apprehensive about investing in 1-ounce gold bars right now. After all, the idea of buying an asset at the peak and watching prices tumble is a valid concern. But if you look closely at the factors driving gold's ascent, you may find that it still makes sense to add this precious metal to your portfolio.
For starters, the economic landscape is being impacted by persistently high inflation, which is a threat to consumers' purchasing power and savings. And, as the cost of living continues to climb, many investors are turning to gold to protect their purchasing power. That's because, unlike fiat currencies, which can be devalued by excessive money printing, gold has intrinsic value and has historically served as a reliable inflation hedge.
Gold has also historically proven to be a safe-haven asset during periods of geopolitical turmoil, much like what we're currently facing. During these periods of uncertainty, investors will turn to gold for its track record of maintaining its value during crises. In turn, owning 1-ounce gold bars can provide a sense of security and stability in today's unusual geopolitical landscape
And, while gold prices are elevated, many analysts believe that gold still has room for further upside given the current macroeconomic conditions and the potential for continued market volatility. With this context in mind, investing in 1-ounce gold bars may be a prudent move.
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4 other reasons to buy 1-ounce gold bars now
But that's not the only reason to consider adding gold to your portfolio. Here are a few other reasons you may want to buy 1-ounce gold bars right now:
The price of gold is dipping
While gold's price recently hit a new record high, the price of gold has dipped in the time since. In fact, it's currently sitting at $2,341.05 per ounce (as of May 28, 2024) — down by nearly $100 per ounce compared to the high of $2,439.98 on May 20. So, if you're trying to purchase gold at a low price point, this could be the opportunity to do so.
But while the price of gold is lower than it was just one week ago, it may not stay that way. Gold prices tend to climb over the long term, but they also tend to fluctuate over the shorter term based on a range of economic factors. So, the price you see today could be a lot different from what it is a few days from now. And, if you wait, you could miss out on investing at a more affordable price point.
These types of gold bars are affordable
Another unique advantage of investing in 1-ounce gold bars is that these bars are relatively affordable compared to larger gold bullion products. While the overall investment can still be significant, these smaller denominations provide a more accessible entry point for investors looking to add physical gold to their portfolios without paying an exorbitant price.
1-ounce gold bars offer liquidity and portability
These types of gold bars also offer a good balance between liquidity and portability. Unlike larger gold bullion products, which can be difficult (and often expensive) to store, 1-ounce gold bars are easy to transport and can be readily sold and converted to cash if needed. This makes them an attractive option for investors who value flexibility and accessibility.
These bars can help diversify your portfolio
Diversification is a key principle of sound investing, and adding physical gold to your portfolio can help mitigate risk and balance out volatility in other asset classes. After all, gold has historically had a low correlation with stocks and bonds, making it an effective diversifier that helps to offset the risks from other assets.
The bottom line
While the recent surge in gold prices may give some investors pause, the underlying factors driving demand for the precious metal show no signs of abating. From its role as an inflation hedge and safe haven to its portfolio diversification benefits and liquidity, there are compelling reasons to consider adding 1-ounce gold bars to your investment strategy.
Of course, as with any investment, it's essential that you conduct thorough research and carefully evaluate your circumstances and risk tolerance to determine whether buying 1-ounce gold bars makes the most sense for you. But in the face of today's unique economic challenges, investing in 1-ounce gold bars could be a prudent move to preserve your wealth and weather any potential storms on the horizon.
