Should you invest in gold now with the price rising?
The price of gold hit a record high in early March and if investors thought that was the new limit they were mistaken. The price of the precious metal has continued to surge, breaking multiple records in April, too. It now sits at $2,291.89 per ounce as of April 3, according to American Hartford Gold and the future price of the yellow metal could easily rise further in the days and weeks to come.
Against this backdrop - and a still persistent (if dramatically cooler) inflation rate - many investors may be wondering if they should invest in gold now. Or are they better served by waiting for the price to drop? While speculating about the future value of any asset is risky, particularly alternative ones like gold and silver, there is a compelling case to be made for investing in gold today. Below, we'll detail three reasons why investors shouldn't wait for a gold price drop to get involved.
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Should you invest in gold now with the price rising?
Here are three reasons why investors should consider gold now.
Economic factors could affect the price
Hope was high at the start of the year that inflation was consistently cooling but recent reports have showed a slight rise. Factors like inflation and higher interest rates meant to combat it can, and have, affected the price of gold previously. Depending on how these factors evolve, then, the price of gold could change. But no expert can effectively predict if a price drop will occur or by how much the price of gold will fall (it could be a minimal amount). Understanding this, then, investors may be better served by buying in now. Depending on the type of gold invested in, it could be relatively easy to sell (or buy more of), if the price changes.
Learn more about investing in gold here today.
The price of gold may become prohibitive
The price of gold around this time last year was about $1,985 per ounce, approximately 15% lower than what it is this April. If this price growth continues unabated the investment could quickly become prohibitive for many. Instead of waiting for the price to drop, then, investors may want to get involved now before today's "high" $2,291 price per ounce becomes tomorrow's "cheap" option. Just make sure not to overbuy at today's high price, either (most experts recommend limiting gold to 10% or less of your overall portfolio).
You'll lose the immediate protections gold can provide
Waiting for the price of gold to drop may not only be a pointless exercise, but it could also cost you in the short term. Without gold in your portfolio now, even at today's elevated prices, you'll miss out on the immediate protections the yellow metal can provide. Gold can be a smart hedge against inflation, as it tends to maintain its value when inflation damages the purchasing power of the dollar. But it can also help diversify your portfolio, offering a buffer for when other assets underperform. These gold characteristics are consistent and valuable - but you'll miss out on them if waiting for an ideal gold price.
The bottom line
As appealing as it may be to wait for the price of gold to fall, it may not be an advisable approach to take. There is no guarantee that the price will fall (recent activity suggests the opposite) and the price may rise so far that the investment becomes out of reach for many. And by waiting for the perfect opening, investors will lose out on the hedge against inflation and portfolio diversification that gold provides consistently, regardless of any record price changes. For these reasons, many would find now a smart time to get invested in the yellow precious metal.
