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Taking Advantage of Gold’s Current High Price
Gold prices have been climbing over the last year, a trend that’s been driven, in large part, by a surge in demand from investors who want to protect their portfolios from inflation. And, it appears that the uptick in gold prices may not be over yet. Gold prices have hit numerous new milestones in the last few weeks alone — climbing from a record high of $2,160 per ounce in early March to today’s gold price of $2,353.15 per ounce.
Given the current upward trajectory of gold’s value, it’s no surprise that so many investors are flocking to the precious metal. After all, the opportunity to capitalize on price increases can be tough to pass up, and when you factor in the other benefits of gold investing, it’s easy to see that the yellow metal can be a smart addition to most investment portfolios.
if you’re looking to capitalize on this gold bull market, there are several strategies you can use to benefit from gold’s high price — whether you’re an experienced investor or are just starting out.
Find out more about your gold investing options online now.
How to benefit from gold’s high price now
By employing these strategies, you may be able to capitalize on the high gold prices we’re seeing today:
Invest in physical gold bars and coins
One of the most straightforward ways to gain exposure to gold is by purchasing physical gold bars or coins. Holding physical gold can provide a sense of security and it can act as a tangible asset to your investment portfolio. Plus, as gold prices rise, the value of your physical holdings will increase as well, allowing you to benefit from future price increases.
You should note, though, that the price of physical gold may not appreciate as quickly as some other types of gold investments. It tends to be more of a long-term investment. But the tradeoff is that it can be a stable hedge against inflation and market volatility — and its value tends to increase over time — so if you buy in now and hold your gold bars or coins, you could see some hefty returns in the future.
Explore the benefits of gold investing today.
Invest in gold mining stocks
If you’re seeking more leveraged exposure to the gold market, gold mining stocks can be an attractive option right now. When gold prices rise, like they are currently, the profits of gold mining companies tend to increase. This, in turn, can lead to higher stock prices and potentially bigger dividends for investors, so putting some money into gold mining stocks right now could be a smart move.
Buy gold ETF shares
Another option for capitalizing on today’s high gold prices is buying shares of gold exchange-traded funds (ETFs). Gold ETFs provide a diversified way to gain exposure to the gold market by allowing investors to buy into a range of gold-related assets, including physical gold bullion, gold stocks and gold futures contracts.
These funds offer instant diversification and liquidity with relatively low expense ratios compared to other gold investment products. And, because gold ETFs tend to be riskier investments than gold bars and coins, the right investment could lead to bigger returns over the short term, especially given the current trajectory of gold prices.
Consider gold futures and options
If you’re a more experienced investor, you may want to explore trading gold futures and options as a way to potentially generate outsized returns from the gold price movements that are occurring right now. Gold futures allow you to speculate on the future price of gold, while gold options give you the right, but not the obligation, to buy or sell gold at a preset price.
While trading gold derivatives can be more complex than simply buying physical gold or gold stocks, the potential upside can be significant if you get the direction of gold prices right. Just be aware that futures and options also carry higher risk, so they’re not suitable for all investors.
Invest in gold jewelry and collectibles
You could also consider investing in gold jewelry, coins or other collectibles as a way to benefit from today’s high gold prices. While these physical gold assets don’t necessarily track the gold spot price as closely as other investments, they can still appreciate in value as the underlying metal becomes more expensive.
For example, rare and antique gold coins, as well as unique jewelry pieces from reputable makers, can be good stores of value. They may even rise in price at a faster rate than the gold spot price, depending on factors like scarcity and collector demand.
The bottom line
With gold prices reaching new heights, now is an opportune time to explore ways to capitalize on the current gold bull market. Whether you choose to buy physical gold, invest in gold mining stocks, purchase gold ETFs, trade gold derivatives or invest in gold collectibles, there are numerous strategies available to help you benefit from the yellow metal’s strength.
As with any investment, though, it’s crucial to do your due diligence, understand the risks and invest within your risk tolerance. But by leveraging the right approach, you can position yourself to profit from the ongoing gold price surge.
News
Is now the right time to invest in gold as prices have cooled?
The price of gold has climbed to record highs recently and has remained strong through much of April. And, that growth continued until the precious metal traded at around $2,390 per ounce on April 19, 2024. But since, growth in the price of the precious metal has cooled, with gold’s price now hovering around $2,300 per ounce.
This lull in gold’s price may represent an investment opportunity.
In general, investing is centered around buying assets when prices are low and selling them when prices are high – generating a profit on the difference between the two. So, considering the declines in gold’s price over the past few days, now may be the time to make your investment. But is buying gold during this lull in prices really a good idea?
Compare your gold investment options among leading brokers now.
Gold prices have cooled. Should you buy in now?
With gold’s price down from recent highs, you may be wondering if now is the right time to buy in. There are several reasons the dip in gold’s price may represent an opportunity to buy. Here are some of the biggest:
Prices may rise again
If looking at a gold price chart shows anything for certain, it shows that changes in the overall growth of the medal come in fits and spurts. Periods of price growth are typically followed by periods of declines and vice versa.
But with inflation rising in recent months – and with gold’s reputation as a safe-haven asset that can hedge against inflation – it only makes sense that the price of the precious metal will eventually start to head up again in the future. While attempting to time that directional change may be tricky, buying the precious metal while the price is down gives you the opportunity to take advantage of any upward movement that may be ahead.
Add gold to your portfolio now before prices have a chance to rise.
You may be able to make a quick profit
Gold isn’t known as an asset in which you can earn a quick return, but in today’s market, that may be the case. Don’t forget that in January, gold was trading at just $2,000 per ounce. And, by mid-April, the commodity’s price had climbed to around $2,400 per ounce. That’s about 20% growth in a matter of months, much of which happened since March 1 – an impressive climb for any investment asset.
Perhaps more importantly, gold’s price growth through the beginning of 2024 shows that the commodity doesn’t have to be a buy and hold style investment that you keep in a safety deposit box or precious metal depository for years to come. There’s also the possibility that the commodity’s price could climb further ahead, making it a compelling way to potentially generate a quick profit.
There are other benefits of investing in gold
There are other benefits of investing in gold that have little to do with the price growth seen thus far in 2024 – or the lull in prices seen over the past couple of days. Those benefits include:
- Inflation protection: Gold has long been considered an inflation hedge, and for good reason. When inflation drives the prices of consumer goods and services up – and the value of the dollar down – gold’s price tends to rise. So, it could be used to maintain the value of your portfolio during inflationary economic conditions. That’s important in today’s economic environment as stubborn inflation continues to weigh on the value of the dollar.
- Portfolio diversification: Gold’s price doesn’t always move in the same pattern that bonds or stocks do. So, mixing a reasonable amount of gold into your portfolio (up to 10% of your portfolio assets) as a diversifier could protect you from losses should one or more of your traditional portfolio assets fall in value. “If you have less than 5% – 10% of your net worth in commodities & FX (forex), you should absolutely consider adding exposure to gold and other precious metals,” says Vijay Marolia, money manager and managing partner at the wealth management firm, Regal Point Capital.
The bottom line
Gold’s price has fallen from recent highs – which may represent an opportunity to tap into growth ahead. However, gold isn’t simply a “buy while it’s low and sell while it’s a high” kind of investment opportunity. The commodity can also protect your portfolio from the stubborn inflation we’ve seen thus far in 2024 while acting as a diversification tool that could increase your risk-adjusted portfolio returns. So, consider adding gold to your portfolio today while it has the potential to grow in value.
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