Inflation, economic uncertainty and expectations of Federal Reserve rate cuts have all combined to push the price of gold to record highs.
The price of gold closed Friday at a record $2,500 an ounce and added slightly to the record in Monday’s trading. Since most gold bars contain 400 ounces of gold, people who have a gold bar in their safe are now millionaires.
Many analysts think the price of the precious metal has more room to run. Fortune reports that Commerzbank Research analysts have updated their gold price outlook for 2024, as prices have already risen more than 20%.
The analysts expect the price of gold to reach $2,600 an ounce by the middle of 2025, but some traders expect prices to reach that level by the end of this year. They point to heavy gold buying by central banks around the world and the expectation of three Fed rate cuts before the end of 2024.
Investors considering a gold purchase should carefully vet potential dealers. The ConsumerAffairs Research Team analyzed 25 dealers and selected the six best.
Pros and cons
While a fiat currency can be overprinted and devalued, gold and other precious metals are tangible assets with naturally limited supplies. This helps keep the market value of gold stable, which makes it an attractive investment option for many people.
Most people buy gold because it has historically held its value, which can protect against inflation. Precious metals may act as a hedge for storing wealth in times of economic and political uncertainty.
Investors should understand that gold is not guaranteed to keep its value. Opponents of gold also don’t like that it isn’t a cash-generating asset. Compared with stocks, the long-term returns are relatively low.
