An unsteady economic landscape has meant that investorshave been forced to rethink their strategies in certain cases.This type of environment can result in market volatility, which, while it can have its advantages, creates a very risky arena for investors and traders.
Commodities and metals have offered somewhat of a safe haven for investors in the past, as they tend to help counteract the impacts of inflation. A key example of this is gold – but is this a worthy investment in 2024? Here’s what you need to know before deciding your next move.
Is gold preserving its status as a safe investment in 2024?
While no investment is truly reliable, past performance can inform an investor’s decisions before they execute a trade.Historically, gold has been a reliable investment to the extent that even when the pandemic hit in 2020, the price of gold reached an all-time high of $2,074 per ounce.
Gold is viewed by many as a sturdy investment in uncertain economic circumstances because it tends to maintain its value or even increase when prices rise elsewhere. Some view gold as a good investment for diversifying their portfolio too. With a reliable trading platform with sophisticated tools and analysis, you can look at data to help inform your decisions as an investor, regardless of how experienced you are.
Something to consider is that the economy is expecting to pick back up, however ongoing conflicts such as the Russia-Ukraine conflict could continue to push up the price of gold.This could help you acquire growth in the long run.
When to invest in gold
While there’s never a bad time to invest in gold, consideration of timing could help you maximise returns.
Something to bear in mind is that inflation is cyclical, so investors wanting to invest in gold may want to do so before itstarts to increase again. This makes investing in the commodity a long-term growth strategy, more so than one of short-term growth.
By investing in gold sooner rather than later, you could not only diversify your portfolio but potentially benefit from long-term gains through a buy, store and sell approach.
Why investing in gold might not be the best idea for you
As with any investment, make sure you have full transparency of the risks involved.
Investing in gold requires the need for storage, which demands more input from the investor. Annual storage fees can eat into profits.
Then, of course, commodities like gold aren’t liquid in the way that stocks are. You can’t enter and exit trades with instant funds. You need to be patient when it comes to converting gold into cash – and if you’re in an emergency, this isn’t always ideal.
