Gold reaches new heights in 2024 – key points for investors

Factors driving gold’s price increase

The U.S. Federal Reserve’s recent half-point rate cut has fueled gold’s rising value. Lower interest rates have traditionally encouraged investors to turn to gold as a hedge against uncertainty. Additional factors driving demand include actions by the central banks of China, India, and Turkey to lessen dependence on the U.S. dollar, further boosting gold purchases.

Retail access has expanded as well. With 1-ounce gold bars now available through stores like Costco, many individual buyers find it easier to add gold to their portfolios. Joseph Cavatoni, senior market strategist at the World Gold Council, noted that Costco’s decision to offer gold makes it as accessible as any common household item.

Gold as a secure investment

Gold is traditionally favored during economic instability. Historically, gold has held its value even during market downturns, as shown by a 101.1% rise in the Producer Price Index for gold between 2008 and 2012. Gold’s stability attracts those seeking safety, with Cavatoni highlighting that the asset “does well during moments of market risk.”

Steps to buying gold and investment options

For new investors, understanding the purpose of gold investment is crucial. Begin by identifying if the goal is to diversify a portfolio or to secure a safe-haven asset. Once the goal is clear, investors can choose between physical gold and gold-backed ETFs.

• Physical gold: Tangible value but involves costs and logistics for storage and security.
• Gold-backed ETFs: Similar to buying stocks, offering low-cost access without handling physical gold.

Cavatoni advises that before purchasing, buyers should compare bullion prices with the spot market price to ensure fair value. He emphasizes choosing trustworthy vendors and considering how easily gold can be resold if needed.

Approaching gold investment wisely

Investors have many options, from banks and physical retailers to online platforms. Cavatoni recommends a “round-trip mentality” – buyers should plan for both purchase and resale, partnering with reliable sellers for future transactions.

For those who want convenience, gold-backed ETFs offer simple, low-cost entry and exit points without requiring physical storage. Cavatoni warns investors to research before acting, as caution is more important than speed in any investment. Avoiding impulsive decisions ensures that investors choose gold confidently and wisely.

source: CTV News