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The price of gold is on the rise yet again.
Following some recent cooling, gold hit a new price record this week, surpassing $2,500 per ounce. That follows months of record-breaking price movement after the precious metal started the year priced at $2,063.73 per ounce on January 1. That’s a 21% increase in just over seven months, emphasizing the benefit of investing in gold now. But with the prospect of additional gold price increases likely (some experts predict a $3,000 price point), an evolving interest rate climate and a cooling inflation rate, the price could change again soon.
Both beginners and those already invested in the metal, then, should take a strategic approach to this unique asset right now. Below, we’ll break down three smart gold investing moves to make before the price rises once again.
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3 smart gold investing moves to make before the price rises again
As gold’s price seemingly continues to rise uninhibited, investors should consider making the following moves now:
Buy in before the cost becomes prohibitive
If you want to invest in gold but are concerned about the costs then you should consider acting aggressively now. The price could quickly become prohibitive if you wait. And with new unemployment figures, inflation data and another Federal Reserve meeting all on the calendar for the next few weeks, there are plenty of influencing factors that could cause the price to increase yet again. So don’t wait for that to happen.
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Limit your investment
It can be tempting to overinvest in gold now thanks to its consistently rising price. But that would be a mistake, even amid recent performance. Gold is typically best used as a safe-haven asset, hedging against inflation and diversifying portfolios otherwise too heavily involved in stocks and bonds. And those traditional gold investing benefits are unlikely to change anytime soon, even if the price starts hovering near $3,000 per ounce. So don’t overinvest and crowd your other, reliable income-producing assets. Instead, limit your gold investment to 10% (or less) of your overall portfolio.
Use it to earn a quick profit
Gold is not, historically, a smart way to produce income. Its other features are typically more beneficial for investors, as noted above. But this is a historic time for gold prices and precious metal investing so you can, theoretically, use it to earn a quick profit by buying in now and selling when the price spikes again. You’ll have to get the timing right and be willing to take a calculated risk. However, if you had used gold to turn a quick profit earlier this year, you could have made hundreds, if not thousands, of dollars in profits if bought and sold in the right amounts at the opportune times.
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The bottom line
The consistently rising price of gold presents a unique opportunity for investors, but they’ll need to take a nuanced approach to benefit. This includes buying in now before the metal has a chance to rise in price once again, but it also extends to limiting gold to no more than 10% of your overall portfolio. When bought and sold at the right time, investors can also use it to earn a quick profit now, which is a rare opportunity for an asset better known for its portfolio protection. These moves will evolve as the price of gold does, however, so it’s also critical to closely monitor the gold investing climate in order to improve your chances of success.