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- Gold Just Became Cheaper !
Gold Just Became Cheaper !
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The Safe Investor
November 12, 2024
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Gold has been a remarkable performer throughout 2024, reaching record highs amid economic uncertainty. On the eve of the recent U.S. presidential election, gold per ounce hit $2,748—up over 33% year-to-date. However, following former President Donald Trump’s decisive election win, gold’s price took an unexpected hit, dropping by 3% to $2,673 per ounce. This sudden decline leaves many investors wondering: Is this the perfect time to buy gold, or a warning of further price drops?
Why Is Gold Falling?
The decline in gold’s price after Trump’s victory is largely due to rising bond yields and a stronger U.S. dollar. Trump’s proposed policies, such as tariffs and immigration controls, have raised inflation concerns. This led to higher bond yields, with the 10-year U.S. Treasury yield climbing to a four-month high of 4.46%. The dollar also rose 1.6% against other currencies, making gold—which has a negative correlation with the dollar—less attractive to investors.
Should You Buy Gold Now?
Despite these recent drops, gold may still be a strong investment. Historically, gold has proven to be a resilient asset, especially during times of economic uncertainty. Analysts predict that demand for gold will continue to grow, with some expecting it to reach $3,000 per ounce by 2025. Additionally, gold remains a valuable hedge against inflation, which could increase if inflation fears materialize under Trump’s proposed policies.
Benefits of Gold in a Diversified Portfolio
Gold serves as a reliable asset to offset risks in other markets. During economic crises or inflationary periods, gold often outperforms stocks and bonds. This is crucial in today’s environment, where economic volatility is driven by inflation fears, potential interest rate adjustments, and global tensions. For those concerned about the future purchasing power of cash, gold also serves as an inflation hedge, helping protect the value of assets over time.
Central banks worldwide are bolstering their gold reserves to diversify their assets, which helps stabilize demand. Industrial uses for gold, especially in electronics and medical devices, further contribute to long-term demand.
What Gold Investments Make Sense?
If you’re considering investing in gold, here are three main options:
Physical Gold: Gold bullion bars and coins provide a tangible asset that can offer a sense of security. However, storing and insuring physical gold can be costly.
Gold ETFs: These funds allow you to own gold without dealing with physical storage. ETFs offer liquidity and lower costs, making them a popular choice.
Gold Mining Stocks: Investing in gold mining companies can provide exposure to gold’s price performance indirectly, though these stocks can be volatile due to factors like production costs.
Bottom Line
The recent price drop presents a unique opportunity for investors to buy gold at a lower price. While short-term fluctuations are possible, gold’s long-term outlook remains positive. Whether you choose physical gold, gold ETFs, or mining stocks, gold’s ability to hedge against inflation, add diversification, and serve as a safe haven makes it a valuable asset in many portfolios.
This Stock is Up 220% and Primed for the Next Breakout
Bank of America analysts predict gold will hit $3,000 by 2025 — and this hidden gold stock is set to benefit.
With gold's post-election dip, now could be a good opportunity to consider adding to your portfolio. Savvy investors understand the value of holding gold and gold stocks.
This stock has made impressive gains in recent years, and with insiders continuing to buy, it's one to keep on your watchlist.
P.S. The last gold stock we highlighted in this newsletter saw a strong rally, climbing over 60% just days after our feature. Be sure to keep this one on your watchlist!
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