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The the price of gold has risen to record highs recently and has remained strong for much of April. And this growth continued until the precious metal traded around $2,390 per ounce on April 19, 2024. But since then, the precious metal's price growth has cooled, with gold price it is now around $2,300 an ounce.
This lull in the price of gold can represent an investment opportunity.
In general, investing focuses on buying assets when prices are low and selling them when prices are high, making a profit on the difference between the two. Therefore, considering the declines in the price of gold over the past few days, now may be the time to make your investment. But it is buying gold during this lull in prices really a good idea?
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Gold prices have cooled. Should you buy now?
With the price of gold below recent highs, you may be I wonder if now is the right time to buy there. There are several reasons why falling gold prices can represent a buying opportunity. Here are some of the biggest ones:
Prices may rise again
If a chart of gold prices shows anything for sure, it shows that changes in the overall growth of the coin come in the form of bumps. Periods of price growth periods of decline usually follow and vice versa.
But with inflation rising in recent months, and with gold's reputation as a safe haven asset that can protect against inflation, it only makes sense that the the price of the precious metal will start to rise again in the future. While trying to time this change in direction can 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 is not known as an asset where you can make 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 an ounce. And by mid-April, the price of the commodity had risen to about $2,400 an ounce. This represents a growth of around 20% in a matter of months, much of which happened since March 1st – an impressive upside for any investment asset.
Perhaps most importantly, gold's price growth through early 2024 shows that the commodity doesn't have to be a buy-and-hold style investment that you hold in a safe deposit box or bullion vault for months. next years There is also the possibility that the price of the commodity may rise further down the line, making it a compelling way to can generate a quick profit.
There are other benefits of investing in gold
There are other benefits to investing in gold that have little to do with the price growth seen so far in 2024, or the lull in prices in recent days. These benefits include:
- Inflation protection: Gold has long been considered an inflation hedge, and for good reason. When inflation drives up the prices of consumer goods and services, and the value of the dollar down, the price of gold tends to rise. Therefore, it could be used to maintain the value of your portfolio during inflationary economic conditions. This is important in the current economic environment, as stubborn inflation continues to weigh on the value of the dollar.
- Diversification of portfolios: The price of gold does not always move in the same pattern as bonds or stocks do. So mix a reasonable amount of gold into your portfolio (up to 10% of your portfolio assets) as a diversifier could protect you from loss if one or more of your traditional portfolio assets decline in value. “If you have less than 5% to 10% of your net worth in commodities and forex (forex), you should absolutely consider adding exposure to gold and other precious metals,” says Vijay Marolia, money manager and partner asset management manager. firm, Regal Point Capital.
The bottom line
The price of gold has fallen from recent highs, which may represent an opportunity to take advantage of future growth. However, gold is not simply a “buy low and sell high” investment opportunity. Merchandise can also protect your wallet from the stubborn inflation we've seen 2024 so far as it acted as a diversification tool that could boost your portfolio's risk-adjusted returns. So consider adding gold to your portfolio today while it has the potential to grow in value.
Joshua Rodriguez
