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Gold’s price growth has been interesting to watch thus far in 2024. After trading at $2,063.73 per ounce on January 1, the commodity’s price climbed more than 18% to trade at $2,439.98 per ounce by May 20. While that price has cooled since, with gold trading at $2,365.77 per ounce today, gains in the precious metal are still 14.64% year-to-date.
That’s impressive growth. And, there are several reasons that growth may continue ahead. So, it may be a good idea to buy into gold now – especially if you’d like to take part in the future price growth of the commodity.
Compare your gold investing options now.
6 reasons to buy gold with the price up
Gold’s price growth thus far in 2024 has been impressive. But, it’s not the only reason to add the commodity to your portfolio right now. Here are a few others:
Inflation protection
“Gold has historically maintained its value over time, making it an effective hedge against inflation,” explains Matt Teifke, co-owner of the financial planning firm, TR3 Capital.
And, that inflation protection is important given the current economic climate. While inflation has begun to cool, prices grew 3.3% year over year in May. Should persistent inflation continue, it could help the price of gold climb.
“The best way to think of gold is not necessarily as an investment; it makes more sense to think of gold as money,” explains Vijay Marolia, money manager and managing partner at the financial planning firm, Regal Point Capital. “So, if all of your money is in US dollars, your money is losing more than 3% per year in terms of purchasing power. By holding a portion of your liquid net worth in gold and other precious metals, you can better protect your purchasing power as inflation continues to eat away at the dollar.”
Protect your portfolio from inflation with gold today.
Diversification
“Including gold in a diversified portfolio can reduce overall risk due to its low correlation with other asset classes like stocks and bonds,” says Teifke. So, you could increase your risk adjusted returns by diversifying your portfolio with gold. But, when you do, keep in mind that you should limit your gold investments. A well-balanced portfolio typically includes a 10%, or lower, allocation to gold.
A current discount
While gold’s price is up over 14% year-to-date, it’s down just over 3% from its most recent high. So, if you buy gold right now, before the price heads back up, you can do so at a discount.
Safe haven qualities
“Gold tends to perform well during economic downturns, geopolitical tensions, and market volatility, providing a safe haven for investors,” says Teifke. Those safe haven qualities are important today. Geopolitical conditions are concerning and with the presidential election taking place later this year, political market risks could soon become a reality.
Liquidity
“Gold is highly liquid, meaning it can be easily bought and sold in the market,” explains Teifke. So, when you want to add gold to your portfolio, you should find it easy to do so. And, when you decide it’s time to sell your gold investments, you shouldn’t have a hard time finding a buyer.
Universal value
“Gold is universally recognized and valued, making it a reliable store of value globally,” says Teifke.
“Gold has been money for 5,000 years and it continues to be accepted in any country around the world,” says Marolia in agreement with Teifke.
The bottom line
Gold’s price has climbed substantially this year with the potential to rise even higher. And it’s easy to understand why. Thanks to the inflation protection it can offer, portfolio diversification, safe haven qualities and liquidity, many investors would benefit from adding gold to their investments now. And with universal value but a drop in the current price, it makes sense to act promptly, before the cost of the precious metal becomes prohibitive. Compare your gold investing options now!
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