Why Investors Are Flocking to Gold, Pushing Price
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Posted On: 03/13/2024 4:40:29 PM
Why Investors Are Flocking to Gold, Pushing Price Higher
Investments in gold have spiked recently, for good reason. Inflation is affecting the value of the dollar while high rates and market volatility are causing economic uncertainty in different parts of the globe. In such times, investors traditionally flock to gold as a safe haven.
This isn’t the only thing driving interest in the precious metal either. The recent price of gold has seen steady growth, with spot price reaching $2,160 an ounce.
Below are some key reasons why investors are adding gold to their portfolios right now.
To hedge against inflation
A report issued earlier this year showed inflation at 3.1%, which is higher than the Fed’s 2% target. Unlike traditional currencies, which lose value over time, gold’s use as a store of value allows it to grow and retain its value even during high inflation periods.
Investors use gold to protect their portfolios against rising prices caused by inflation. The precious metal does this by maintaining the value of assets.
For a reliable store of wealth
Historically, gold has been heralded as a reliable store of wealth. This means that its value tends to increase or withstand outside pressures, even when traditional currencies fluctuate or lose value.
To diversify one’s portfolio
Diversifying one’s portfolio is important as an investor, especially as market dynamics continue to evolve. By including safer assets in their portfolios, investors can balance risks from volatile instruments such as stocks. Gold usually moves conversely to the stock market.
To protect against losses from geopolitical tensions
The global economy is being affected by geopolitical tensions, which may push the price of gold higher. When there are major political issues or uncertainties caused by conflicts between countries, investors often seek out gold because of its historical safe-haven quality.
It also helps that gold is an accepted form of wealth as well as a tangible asset.
Apart from gold’s role in preserving wealth, diversifying portfolios and hedging against inflation, the precious metal’s durability and intrinsic value increase its appeal. The fact that gold is not subject to the same risks as other investments, such as bankruptcy or default, also make it a secure asset to use in uncertain times.
Investors are advised to seek gold for stability, especially because it doesn’t rely on third-party obligations. With an unusual economic climate and uncertainty all around, one would do well to include the precious metal in their portfolio.
For those investors who aren’t keen on buying physical gold, stocks of gold exploration entities such as Reunion Gold Corp. (TSX.V: RGD) (OTCQX: RGDFF) can offer an alternative, although adequate due diligence is a prerequisite if one is to benefit from holding any stocks.
NOTE TO INVESTORS: The latest news and updates relating to Reunion Gold Corp. (TSX.V: RGD) (OTCQX: RGDFF) are available in the company’s newsroom at https://ibn.fm/RGDFF
Please see full terms of use and disclaimers on the MiningNewsWire website applicable to all content provided by MNW, wherever published or re-published: https://www.MiningNewsWire.com/Disclaimer
Investments in gold have spiked recently, for good reason. Inflation is affecting the value of the dollar while high rates and market volatility are causing economic uncertainty in different parts of the globe. In such times, investors traditionally flock to gold as a safe haven.
This isn’t the only thing driving interest in the precious metal either. The recent price of gold has seen steady growth, with spot price reaching $2,160 an ounce.
Below are some key reasons why investors are adding gold to their portfolios right now.
To hedge against inflation
A report issued earlier this year showed inflation at 3.1%, which is higher than the Fed’s 2% target. Unlike traditional currencies, which lose value over time, gold’s use as a store of value allows it to grow and retain its value even during high inflation periods.
Investors use gold to protect their portfolios against rising prices caused by inflation. The precious metal does this by maintaining the value of assets.
For a reliable store of wealth
Historically, gold has been heralded as a reliable store of wealth. This means that its value tends to increase or withstand outside pressures, even when traditional currencies fluctuate or lose value.
To diversify one’s portfolio
Diversifying one’s portfolio is important as an investor, especially as market dynamics continue to evolve. By including safer assets in their portfolios, investors can balance risks from volatile instruments such as stocks. Gold usually moves conversely to the stock market.
To protect against losses from geopolitical tensions
The global economy is being affected by geopolitical tensions, which may push the price of gold higher. When there are major political issues or uncertainties caused by conflicts between countries, investors often seek out gold because of its historical safe-haven quality.
It also helps that gold is an accepted form of wealth as well as a tangible asset.
Apart from gold’s role in preserving wealth, diversifying portfolios and hedging against inflation, the precious metal’s durability and intrinsic value increase its appeal. The fact that gold is not subject to the same risks as other investments, such as bankruptcy or default, also make it a secure asset to use in uncertain times.
Investors are advised to seek gold for stability, especially because it doesn’t rely on third-party obligations. With an unusual economic climate and uncertainty all around, one would do well to include the precious metal in their portfolio.
For those investors who aren’t keen on buying physical gold, stocks of gold exploration entities such as Reunion Gold Corp. (TSX.V: RGD) (OTCQX: RGDFF) can offer an alternative, although adequate due diligence is a prerequisite if one is to benefit from holding any stocks.
NOTE TO INVESTORS: The latest news and updates relating to Reunion Gold Corp. (TSX.V: RGD) (OTCQX: RGDFF) are available in the company’s newsroom at https://ibn.fm/RGDFF
Please see full terms of use and disclaimers on the MiningNewsWire website applicable to all content provided by MNW, wherever published or re-published: https://www.MiningNewsWire.com/Disclaimer
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