Why you should invest in gold before the May inflation report is released
Following disappointing reports for January, February and March, all eyes will turn to the Bureau of Labor Statistics next week to determine whether there's been any success in lowering the inflation rate. Currently stuck at 3.5%, inflation is more than a full percentage point above the Federal Reserve's target 2% goal. Inflation has not only resulted in interest rates hitting their highest point in decades but because it's been so sticky it's also resulted in interest rates staying where they are. That has had numerous repercussions for the broader economy.
It's also resulted in a reexamination of investments, with many turning to alternative ones like gold and silver. Ahead of the inflation report scheduled for a May 15 release, then, many investors may want to consider the precious metal right now. Below, we'll break down three reasons why you should invest in gold before the May report is released.
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Why you should invest in gold before the May inflation report is released
Here are three reasons why it may be smart to invest in gold before the next inflation report is released.
The price could rise again
The price of gold today sits at $2,318.60 per ounce. But that price has risen significantly since March 1, breaking numerous records in the process, and many experts predict it will continue to rise. But if the next report shows inflation steady or increasing, the price of the precious metal could rise again as investors scramble for a safe-haven asset to add to their portfolio. And with the price of the metal already high, waiting for that to happen may not be the best move. Instead, it makes sense to buy in before the price becomes prohibitive.
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You may be able to make a quick profit now
Gold has historically not been an income-producing asset. And it should still should generally not be treated as such. But with the volatility in the price that we've seen in recent weeks and the likelihood that it could tick up higher if the inflation report comes in hot, now may be one of the rare times that investors could make a quick profit by investing in gold. If you buy in at today's price and the released report causes that price to surge, you can potentially make a quick profit in just a few weeks — a rarity for an asset better known for long-term protection and as an inflation hedge.
You can protect your portfolio in advance
If the inflation report shows a rise in the rate — or even if it simply shows inflation holding steady — that could ding the performance of other assets like stocks and bonds. It's beneficial, then, to add some protection to your portfolio in advance of that likely scenario. Gold can help by often holding steady in value during inflationary periods. It can even rise in value, as recent months have demonstrated, during such periods. This will then soften the impact felt by other, more volatile assets if the report released does come in hotter than most want.
The bottom line
The timing behind any investment class is critical to get right. And with the next inflation report scheduled to be released mid-month, now may be an opportune time to invest in gold. By acting now investors could get in early, before the price rises again and they'll position themselves to potentially earn a quick profit if they sell after a price rise, post-inflation report release. Plus, they'll secure helpful protection now, in advance of when they may need it most.
