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Gold has, for decades, been an alluring investment asset thanks to the unique benefits it offers. However, it has become an increasingly attractive option in today’s economic environment. After all, it’s one of a few alternative investment assets that can be used to diversify your portfolio, protect your wealth and hedge against inflation. But those aren’t the only draw of gold right now.
The allure of gold has been further amplified by its recent price surge, which has seen the commodity hit multiple record highs throughout 2024. The trend began in March, when gold reached a new pinnacle of $2,160 per troy ounce, marking an 8% increase from the previous record of $2,135 set in December 2023. The price of gold then soared to $2,259.29 per ounce on April 1 before reaching an unprecedented $2,439.98 per ounce in late May.
And, while there has been some price moderation since then, recent weeks have resulted in renewed momentum in gold prices. As of July 15, 2024, gold was trading at $2,411.71 per ounce, putting the price of gold close to its recent high. And, if this upward trend persists, we may soon witness yet another record-breaking high. Given this bullish scenario, it could be wise to consider making a few strategic moves to capitalize on gold’s potential.
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Gold prices are near a new record high. 3 savvy moves to make now
Here are three savvy moves you might want to consider making as the price of gold continues to climb.
Add 1-ounce gold bars to your portfolio
With gold prices hovering near record highs, purchasing 1-ounce gold bars could allow you to gain a significant store of value in a compact, tangible form — and could also allow you to directly capitalize on the recent upward price trend. After all, the current price momentum suggests that there’s potential for further gains, meaning that this could be an opportune time to acquire physical gold.
For example, while gold prices tend to increase over the long term, the price surge from $2,160 in March to above $2,400 a few months later demonstrates gold’s ability to rapidly appreciate. And, by owning 1-ounce bars, you’re positioned to benefit directly from any continued price increases. If gold reaches the highs as some analysts predict, the value of your physical holdings could increase substantially.
But the upward price trend is just part of the equation. As global economic uncertainties persist, physical gold also serves as a trusted safe-haven asset. The tangible nature of gold bars provides a sense of security that paper assets can’t match, especially in times of financial market volatility. And, while inflation has been tempered a bit over the last few months, inflation concerns are still present. That makes gold’s role as an inflation hedge even more relevant right now.
Learn more about how the right gold investment could boost your portfolio today.
Buy gold mining stocks
Putting some money into gold mining stocks may also be worth considering right now, as these types of stocks offer a way to potentially amplify your returns from the current gold price rally. That’s because as gold prices have climbed, many gold mining companies have seen their profit margins expand. This can translate to higher stock prices and increased dividend payouts for stockholders.
For example, if a mining company’s cost to extract an ounce of gold is $1,000, the recent price increase of over $300 per ounce goes directly to their bottom line. This leverage effect means that a 10% increase in gold prices could potentially lead to a much larger percentage increase in a mining company’s profits and stock price.
And, with gold prices near record highs, mining companies are also incentivized to increase production and explore new deposits. This could lead to discoveries of new gold reserves, potentially boosting the long-term value of these companies beyond the current gold price cycle.
Open a gold IRA
Opening a gold individual retirement account (IRA) could also be a smart move in the current high-price environment, as it allows you to lock in gold at today’s elevated levels within a tax-advantaged retirement account. And, if gold continues its upward trajectory from the current price per ounce, your retirement savings could benefit significantly.
The price surge we’ve seen since March illustrates the potential for substantial gains within a relatively short timeframe. By holding gold in an IRA, you can capture these gains without immediate tax implications, allowing for potentially greater compound growth over time. And, a gold IRA provides a hedge against currency devaluation within your retirement portfolio, so it can be a smart way to save for retirement in nearly any economic climate.
But amid today’s inflationary pressures, gold’s role as a store of value also becomes increasingly important for long-term savings. Plus, the fact that gold has set multiple record highs in 2024 further underscores its potential to outpace inflation and preserve purchasing power.
The bottom line
The recent surge in gold prices presents interesting opportunities for investors. Remember, though, that while the potential for continued price appreciation exists, past performance doesn’t guarantee future results. So, make sure to do your homework and fully understand the potential benefits and considerations. That way, you can find the right option to enhance your portfolio’s performance and capitalize on any future price increases that may occur.