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Have you thought about investing in gold? If so, you’re not alone. Gold has been viewed as a safe investment asset and a currency alternative for some time. In fact, the yellow metal was one of the first currencies in circulation, one that was used before paper money was even invented.
But, if you’ve thought about adding gold to your portfolio, you may be wondering if now is the right time. After all, you don’t want to buy gold ahead of declines in its price. Nonetheless, this May could be an advantageous time to invest in the precious metal. But when you do, it’s important to make your moves in a strategic way. We’ve outlined three of them below.
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3 smart gold investing moves to make for May
If you’ve thought about investing in gold, now may be the time to do so. Here are three smart gold investing moves to make this May:
Get started quickly
This May is a compelling time to invest in gold, but you should get started quickly. Recently, the price of gold has been moving upward, breaking multiple records in the process. But, as with any asset, gold’s price will evolve over time.
On April 19, 2024, the precious metal hit a record high of $2,390.86 per ounce, according to American Hartford Gold. But since, gains have tapered off. Today’s gold price is $2,284.75 per ounce. But that decline may represent an opportunity, as you can buy gold at a more than $100 discount from its recent record high price.
But that lull in gold’s price may not last long. With the recent excitement surrounding the precious metal, gold could start heading up again quickly. And, waiting too long to invest in the precious metal can make the cost of doing so prohibitive.
Start investing in gold now before its price rises.
Consider physical gold
There are several ways to invest in gold. But, one of the most attractive ways to do so in today’s market is to purchase physical gold coins and bars. After all, physical gold is a tangible commodity that may be easier to buy and sell.
Today, gold coins and bars are highly accessible thanks to the fact that big box stores like Walmart and Costco sell them. And, when it’s time to sell your gold, it may be easier to sell the tangible commodity than it would be to sell gold derivative investments like exchange-traded funds (ETFs) or futures.
“Physical gold has a long history of being used as a currency and as a store of value,” explains Doug Carey, owner, founder and president of WealthTrace, a financial planning software solution. “The broad acceptance of gold throughout the world means there are many buyers and sellers, which helps increase the ease of buying and selling it.”
But that’s not the only reason physical gold may be a better option than gold derivatives this May. “When you own physical gold, you don’t rely on the financial stability of a third party,” says Carey. “When you have physical gold you don’t have to worry about a counterparty failing, unlike gold ETFs or gold futures where this risk does exist.”
Use gold to hedge against inflation
Persistent inflation has been a painful reality for some time now. And so far in 2024, inflation reports have come in hot. Though that may be bad news when you’re spending money, it may be good news for gold investors.
That’s because, as an inflation hedge, gold tends to maintain its value during inflationary periods. So, if inflation continues to rise, the price of gold could follow. And those gains in gold’s price could help balance your overall investment portfolio if you realize inflation-related losses in other assets.
The bottom line
It may be a wise idea to invest in gold this May, but when you do, consider making the moves mentioned above. First, get started quickly. Waiting to invest in gold could mean that you have to pay a higher price later. So, it’s best to purchase your gold now, before the price of the commodity has the opportunity to become cost prohibitive.
Also, consider investing in physical gold rather than gold derivatives. As a tangible asset, physical gold may be easier to buy and sell. Finally, use gold as an inflation hedge to help offset losses felt elsewhere. With today’s persistent inflation, gold could offer meaningful protection for your portfolio.
