Gold's soaring price has everyone talking, and it's time to uncover the pros' advice on how to navigate this golden opportunity.
Throughout history, gold has been a reliable haven during turbulent times. From ancient rulers to Americans during the Great Depression, gold has been a symbol of security and stability. Fast forward to today, and we see a similar trend, with Americans flocking to buy gold bars at Costco and investing heavily in the metal.
This week, gold prices hit an unprecedented $4,000 per ounce, a 50% increase from last year. But here's where it gets controversial: fear, not greed, is driving this market. With the US government in a standstill, inflation rising, and stocks riding on hype, gold is once again shining as the ultimate safety net.
'Investors are jumping on the gold bandwagon due to its strong safe-haven appeal,' says David Morrison, a senior market analyst. Even central banks are joining the gold rush, leaving everyday investors wondering: should we buy more, sell, or hold?
The Daily Mail has gathered insights from a panel of experts to guide you through this golden dilemma. Read on to discover if now is the time to consider adding gold to your 401(k), Roth IRA, or trading account, or even investing in physical gold.
'Gold is on track for its best one-year rally in almost five decades,' says Bret Kenwell, an investment analyst at eToro. 'It has outperformed the S&P 500 in four of the last seven years.'
So, should you snap up gold too?
Investing in gold doesn't require a pirate's treasure chest; there are modern, accessible ways to get started. You can buy shares in gold-tracking funds (Gold ETFs), invest in gold-mining companies, or bet on price hikes through gold futures. Alternatively, you can purchase physical gold coins or bars from trusted sellers, or even consider gold jewelry as a more sentimental option.
Abigail Wright, a senior business advisor at the US Chamber of Commerce, reveals that American companies are quietly adjusting their investment strategies to hedge against inflation and market volatility.
'It's not about hoarding gold; it's about using it as insurance,' Wright explains. 'The smartest firms see gold as a protective measure, not a source of income.'
Wright advises individual investors to follow a similar strategy. She warns against making sudden moves with your retirement savings and suggests adding a small allocation of gold, around 1-5% of your retirement portfolio, through gold-tracking funds. The rest should be invested in stable, long-term assets like stocks, bonds, and cash.
'It's about being prepared,' she says. 'Building resilience involves balancing risk, and gold is one way to achieve that.'
Ray Dalio, the founder of Bridgewater Associates and a renowned market crash predictor, recommends allocating 'around 15% of your portfolio to gold.'
'Gold is an excellent diversifier,' he adds.
While many investors believe gold prices will continue to rise, Kenwell cautions that the long-term outlook is less certain. He highlights that gold can be a tricky asset and that the current rally might need a break.
On Monday, Bank of America warned that the record-high price is unstable and could lead to a rapid decline. The bank cited 'uptrend exhaustion' as a potential trigger for a correction, which could cause gold prices to drop.
This year's gold price surge is a mixed bag for the US economy. While it indicates high market uncertainty, it also presents a significant opportunity for early investors.
Since 2022, gold prices have skyrocketed over 120%. For those who bought an ounce of gold three years ago, their investment would have yielded over $3,000, outperforming the Dow Jones Industrial, Nasdaq, and S&P 500.
'Gold reflects uncertainty,' Wright says. 'When the world feels unstable, people seek stability, and gold provides that.'
So, is now the time to invest in gold? The experts' opinions are divided, and the long-term outlook remains unclear. What do you think? Should investors jump on the gold bandwagon, or is this rally destined for a correction? Share your thoughts in the comments and let's discuss this golden opportunity further!
