Gold prices have cooled. Should you buy in now?

THE the price of gold recently reached record levels and remained strong through much of April. And this growth continued until the precious metal traded at around $2,390 per ounce on April 19, 2024. But since then, the price growth of the precious metal has slowed down, with the price of gold now hovering around $2,300 per ounce.

This lull in the price of gold may represent an investment opportunity.

In general, investing involves buying assets when prices are low and selling them when prices are high – generating a profit on the difference between the two. So, given the drop in the price of gold over the past few days, maybe now is the time to make your investment. But is buy 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 down from recent highs, you could be I wonder if it’s a good time to buy. There are several reasons why falling gold prices may represent a buying opportunity. Here are some of the biggest:

Prices could rise further

If looking at a gold price chart shows anything certain, it shows that changes in the overall growth of the coin occur in fits and starts. Price growth periods are generally followed by periods of decline and vice versa.

But with inflation rising in recent months – and gold’s reputation as a safe haven that can protect against inflation – it makes perfect sense that the price of the precious metal will eventually start to rise again in the future. Although it can be tricky to anticipate this change in direction, buying the precious metal while the price is falling gives you the opportunity to take advantage of any moment. upward movement that could be coming.

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 a quick return asset, but in today’s market it could be. Don’t forget that in January, gold was trading at just $2,000 an ounce. And, by mid-April, the price of the product had climbed to around $2,400 an ounce. This represents growth of around 20% in a few months, much of which has occurred since March 1 – an impressive rise for any investment asset.

Perhaps more importantly, gold price growth through early 2024 shows that the commodity doesn’t need to be a buy-and-hold style investment that you keep in a vault or a repository of precious metals for years to come. It is also possible that the price of the commodity could increase further, making it a compelling way to potentially generate a quick profit.

There are other advantages to 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 price lull seen over the past couple of days. These benefits include:

• Protection against inflation: Gold has long been considered a hedge against inflation, and for good reason. When inflation raises the prices of consumer goods and services – and lowers the value of the dollar – the price of gold tends to rise. Thus, it could be used to maintain the value of your portfolio in inflationary economic conditions. This is important in the current economic environment, as stubborn inflation continues to weigh on the value of the dollar.
• Portfolio diversification: The price of gold does not always move in the same pattern as bonds or stocks. So, mix a reasonable amount of gold in your portfolio (up to 10% of your portfolio assets) as a diversifier could protect you against losses if one or more of your traditional portfolio assets decline in value. “If you have less than 5-10% of your net worth in commodities and foreign exchange (forex), you should definitely consider adding exposure to gold and other precious metals,” says Vijay Marolia, fund manager and managing partner of the wealth management company. company, Regal Point Capital.

The essential

The price of gold has fallen from recent highs, which could represent an opportunity to take advantage of upcoming growth. However, gold is not simply a “buy low and sell high” investment opportunity. The commodity can also protect your wallet from stubborn inflation we’ve seen it so far in 2024, while acting as a diversification tool that could increase your portfolio’s risk-adjusted returns. So consider adding gold to your portfolio today, as its value has the potential to grow.