3 reasons to invest in gold with prices high
The price of gold has broken records so many times in the past few weeks that it's become hard to keep track. After hitting $2,160 per ounce in early March it rose again to $2,259.29 on April 1 and then to $2,292.30 on April 4. Today's gold price is now $2,295.32 per ounce with no clear signs of cooling on the horizon.
These price surges come amid an overall increase in interest in the yellow metal with investing in gold hitting an 11-year high last September. That's due to a variety of factors, all of which have remained relevant as the price has moved upward. But with the cost of the metal becoming prohibitive for some, it pays to understand why it's still worth investing in - even with prices high. Below, we'll break down three reasons to invest in gold right now.
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3 reasons to invest in gold with prices high
Here are three reasons investors may want to get started with gold, even at today's high price.
It can offer protection against inflation
Hope was high at the end of 2023 that inflation was sliding smoothly downward. However, recent reports have demonstrated that it's been a bumpier drop than expected with inflation actually rising to 3.2% in February. That was an increase from January and more than a full percentage point above the Federal Reserve's target 2% goal. Against this backdrop, investors should consider gold and the hedge against inflation it can provide. As has been demonstrated in recent weeks gold tends to maintain its value and can even rise in cost when inflation is problematic, providing a buffer for your portfolio when other assets underperform. This is a valuable benefit in any economic climate but particularly now and it's unlikely to change even with the cost of the metal rising.
Learn more about how gold can protect you from inflation here.
Timing price changes is difficult
Timing the future price fluctuations of any asset can be difficult, if not impossible. While the price of gold has seemingly been on an upward trend for much of the last year, any number of factors could cause it to plateau or even drop. So, if you're looking for an opening when the price has leveled off you could be waiting a long time - and missing out on the portfolio protections gold can provide in the interim.
You may be able to make a quick profit
Gold is generally not considered to be a traditional income-producing investment. While it can grow in value over time, allowing investors to sell it at a higher price, that tends to take an extended period. But with the way gold has been quickly moving upward in recent weeks, it's possible that by buying in now you could make a quicker profit than you normally would with the precious metal. The price of gold is up by more than $120 in just a month, who can say where it could land in May or June? By buying in now, then, you can potentially position yourself for a rapid return on your investment.
The bottom line
With the price of gold seemingly on a one-way track upward, many investors may be considering getting involved now before it's too late. And that could be a smart move. Thanks to the protection it can provide against still-persistent inflation, the difficulty in predicting future price increases (or drops) and the rare potential to turn a quick profit now, it may be advantageous to invest in gold today even with prices high. Just remember to do so with a clear understanding of what gold can and can't do for your finances and aim to keep your investment at 10% or less of your overall portfolio.
