Gold bars and coins could still be valuable for investors now, even as interest rates start to fall.
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Interest rates are falling and could fall again in the months to come.
That was the big economic news this week after the Federal Reserve issued its first cut to the federal funds rate in more than four years. Borrowers saddled with higher rates on everything from personal loans to mortgages can potentially see some economic relief now. But what should investors do in this changing rate climate?
In recent years the clear answer has been to invest in alternative assets like gold.
That made sense due to the precious metal’s ability to hedge against inflation and diversify portfolios. As such, gold investing hit an 11-year high last September. But is this still the right move now as interest rates fall, particularly for those leaning toward buying gold bars and coins? Below, we’ll break down why it could still be a smart move even in today’s changing rate climate.
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Should you buy gold bars and coins as interest rates fall?
In short, gold bars and coins are a good investment in most markets, even in the current cooling rate climate. Here’s why they’re still worth buying now:
A rising price
It’s always smart to get invested in a growing asset before it becomes out of reach. And right now is the time to do so with gold. The price of gold has broken numerous price records so far in 2024, surging past the original $2,063.73 per ounce it started at in January to close to $2,600 per ounce now. And many experts are predicting a rise past $3,000 per ounce soon. With the price of the precious metal largely unaffected in the 24 hours after the first rate cut of 2024 was issued, it makes sense to buy in now before the price becomes prohibitive.
You may be able to get a discount if you buy gold in bulk now.
A tangible asset
Gold bars and coins are unlike most other investments in that they’re tangible and can be viewed, held, stored and inspected by investors. This is a distinct advantage in today’s climate as stocks, bonds and real estate all react in different ways to cooling rates. Gold bars and coins, however, will be easy to store and easy to sell (or buy more of). While those other assets come with their complexities, gold bars and coins offer investors simplicity at a time when it’s arguably most needed.
Portfolio diversification
It’s too early to determine with any specificity what this week’s rate cuts will do to your other investments – or what additional cuts could do in the months to come. In times like these, portfolio diversification becomes particularly important. Gold bars and coins can help as they tend to maintain their value and even rise as economic uncertainty grows. Combined with today’s geopolitical tensions, a U.S. presidential election at home and unforeseen consequences of this week’s rate cuts, it makes sense to diversify your portfolio now. Just be sure that if you’re doing it with gold to not surpass the recommend 10% threshold.
The bottom line
While gold investing has been a smart choice for many in the inflationary years of 2022 to 2024, the economy hasn’t changed so dramatically that it’s not still worth investing in today, particularly via gold bars and coins. By choosing this gold type now investors could position themselves to profit from quick price growth ahead and they’ll do it with a tangible asset that they have easy access to. And by investing in this type of metal today, they’ll diversify their porftolio ahead of what could be a series of cuts and market adjustments to come.
Have more questions? Learn more about investing in gold here now.
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