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The price of gold has been on a remarkable upward trajectory in recent months, shattering numerous price records and attracting the attention of investors across the globe. The trend started early in the year, with gold hitting its first record price of 2024 on March 8. Then, on April 1, gold’s price climbed to another new high, only to be eclipsed again in late May.
The precious metal’s price ascent didn’t end there, either. Gold’s price ascent continued, with the precious metal landing at an unprecedented $2,472 per ounce on July 18. But even that record was short-lived, as gold officially reached its fifth price milestone of the year on August 13 when it surpassed $2,506 per ounce.
This sustained price increase is helping to draw in a new wave of participants to the gold market. If you want to join in on the gold rush, there are several strategic moves worth considering.
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4 gold investing moves to consider
If you want to capitalize on what the gold market can offer you now, here are a few moves to consider:
Add 1-ounce gold bars to your portfolio
As gold prices continue to shatter records, owning physical gold has become an increasingly attractive option — and 1-ounce gold bars, in particular, could be a good bet right now. By adding 1-ounce gold bars to your portfolio, you’ll own a tangible asset, one that can serve as a hedge against inflation and economic uncertainty.
Gold bars are also highly liquid, so it’s typically easy to sell your gold bars and capitalize on future price growth. Plus, these smaller gold bars come with a more affordable price point compared to larger options — and even big box stores, like Costco, now carry them, so they’re widely accessible, too. The compact nature of these bars also means that they’re easier to store and transport.
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Buy shares of gold mining companies
Investing in gold doesn’t necessarily mean purchasing physical bullion. There are alternative ways to gain exposure to the gold market, such as investing in gold stocks, which are shares of gold mining companies. This approach offers an indirect but potentially profitable method of capitalizing on the uptick in gold prices.
When the value of gold increases, it can have a positive impact on gold mining companies’ profitability. As the price of their primary product rises, these companies often see improved profit margins. In the current market, with gold prices exceeding $2,500 per ounce, even small enhancements in production or output can lead to significant earnings growth for mining operations.
A bull market in gold also tends to stimulate increased activity within the mining sector. Companies are motivated to expand their operations, intensify exploration efforts and develop new projects to take advantage of favorable market conditions. Such developments may boost the value of gold mining stocks, potentially making them an attractive option.
Open a gold IRA to prepare for retirement
Another option for incorporating gold into your investment strategy is through a specialized retirement account known as a gold individual retirement account (IRA). This type of self-directed IRA allows investors to hold physical precious metals, including gold, within a tax-advantaged framework.
By using a gold IRA, you can potentially benefit from the stability and growth of gold investments while enjoying the tax benefits typically associated with traditional retirement accounts. Gold IRAs can also act as a safeguard against economic uncertainty and help diversify your investments beyond traditional stocks and bonds.
That said, setting up and maintaining a gold IRA requires careful consideration and expertise, and working with a qualified and trustworthy custodian is important so that your account complies with IRS regulations. Otherwise, you could face legal or financial complications down the road.
Capitalize on the momentum with gold futures
For investors who are comfortable with higher levels of risk and have significant market experience, gold futures contracts present an intriguing option — one that allows you to potentially benefit from the current high gold prices through leveraged positions. These contracts are essentially agreements between parties to trade gold at a specific price on a future date. This allows you to speculate on gold price movements without having to own physical gold.
One of the main attractions of gold futures is their potential for amplified returns during periods of rising gold prices. Due to the leverage involved, even relatively small price increases can result in considerable profits for those holding futures positions. This means that when gold prices are on an upward trend, investing in futures contracts could potentially yield greater returns compared to other forms of gold.
It’s crucial to understand that trading in futures markets comes with substantial risks. The same leverage that can amplify gains also has the potential to magnify losses if the market moves unfavorably.
The bottom line
The record-breaking surge in gold prices presents a range of opportunities worth considering, including investing in physical gold, gold stocks, gold IRAs and gold futures contracts. But while these gold investments could pay off in today’s climate, remember to conduct thorough research and consider your risk tolerance before making any significant investment decisions. Ultimately, though, the golden opportunity is here — it’s just up to you to decide how to best capitalize on it.
