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Over the last few months, investor attention has been largely focused on one asset in particular: gold. While the precious metal has always had an allure for investors, this renewed attention is due, in large part, to gold’s remarkable price journey so far in 2024.
While gold is typically considered a long-term investment, the precious metal has recently bucked that trend, growing in value by hundreds of dollars since the start of the year. The yellow metal was trading at just $2,063.73 per ounce on January 1 but is now sitting at $2,522.28 per ounce (as of August 30). That represents an increase of over $448 per ounce — or an uptick of over 22% — in less than a year.
As we approach September, gold prices are teetering on the verge of yet another historic peak, but economic conditions are also shifting. Inflation has been cooling and the Federal Reserve appears poised to cut rates in September, which could have an impact on the gold investing landscape. This raises an important question for investors: Are 1-ounce gold bars, one of the most popular physical gold investments, still worth investing in this September?
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Will 1-ounce gold bars be worth investing in this September?
The short answer to that question is yes, in most cases, 1-ounce gold bars will likely continue to be a good investment this September, even with the shifts in the economic landscape. Here’s why:
Potential price increases
Gold’s explosive growth so far this year presents a compelling case for quick returns on your investment. With prices soaring by over 22% since January, the gold investors who bought in earlier this year have already seen their investments grow by hundreds of dollars or more, depending on their initial investment.
And that momentum appears far from exhausted. Not only are central banks and investors keeping the demand high, but gold’s limited supply and the increasing difficulty of extracting it are also playing a role. In turn, many market analysts expect continued upward movement in the coming weeks and months, so buying 1-ounce gold bars now could result in significant short-term gains.
As with any investment, though, timing is crucial. The longer you wait to invest in these bars, the higher the entry point may become, potentially diminishing the prospects for rapid gains.
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Liquidity advantages
Gold is considered a liquid asset and 1-ounce gold bars offer exceptional liquidity. After all, 1-ounce gold bars are a globally standardized unit that is recognized and traded worldwide. This universal acceptance means you can easily sell these bars virtually anywhere, from local gold dealers to international markets.
The 1-ounce size also strikes a perfect balance between value and practicality. It’s substantial enough to be worth a significant amount, yet not so large as to limit potential buyers. This makes it easier to sell partial holdings without breaking larger bars. You can sell precisely the amount you need.
Compared to smaller denominations, like 1-gram or 10-gram bars, 1-ounce bars also typically have a lower premium over the spot price of gold. This means you’re likely to recoup a larger percentage of your investment when selling.
Diversification benefits
This type of gold bar can also be a powerful tool for diversifying your investment portfolio. After all, gold typically moves independently of stocks and bonds, which provides a counterbalance during market downturns. As a globally recognized asset, gold can also protect against local currency depreciation. And, during economic or geopolitical instability, gold can serve a safe-haven asset.
By incorporating 1-ounce gold bars into your investment strategy, you’re not just adding another asset to your portfolio; you’re introducing a versatile financial tool that can enhance stability, provide protection against various economic scenarios and offer a physical store of value. This multifaceted approach to diversification can help create a more resilient and balanced portfolio, better equipped to weather various market conditions and economic cycles.
The bottom line
As September approaches, gold’s upward price trajectory is continuing to captivate investors worldwide — and the case for investing in 1-ounce gold bars, which offer the potential for quick appreciation, liquidity advantages and diversification benefits — remains strong. If you’re going to add these gold bars to your portfolio, though, you may not want to wait much longer. While it’s hard to say for certain, it’s likely that the price of gold will continue to climb over time. So if you wait, you could end up paying more and diminishing the opportunity for quick returns on your investment.