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Ahmad Titov
Ahmad Titov

Is Buying Gold A Good Idea Right Now

Is now a good time to buy gold? Are there times in your life, or this year, when buying gold is more beneficial? Let's take a closer look at gold as an investment and when you should consider buying it.

is buying gold a good idea right now

When considering the pros and cons of buying gold, it helps to understand what your goals are. If it's to diversify your portfolio or to hedge against inflation, then gold makes sense to pursue. But if you're an older American who is looking for income-producing investments or, simply, alternative sources of income, then gold may not beneficial.

This may be the most timely benefit of buying gold. With inflation remaining persistent, if lower than it was, now is a good time to invest in something that can keep - and potentially improve - its value.

If the interest you're earning from your other investments (and your savings accounts) hasn't been much lately then explore your gold options to see how you can start making up the difference. It's better to act now before the value rises and the cost of buying gold becomes prohibitive.

If you're an older investor who wants a steady, reliable income from your savings then gold may not be the right move. But for younger people looking to diversify their portfolio, it makes sense to pursue gold.

A gold ETF like GLD is only one way to gain exposure to gold. Among the other methods are buying gold itself, through bullion, coin or jewelry, or by buying it as a commodity that can be traded on commodity exchanges. Another way is by investing in mining stocks like Barrick Gold (GOLD), Franco-Nevada (FNV), Freeport-McMoRan (FCX) or Rio Tinto (RIO). Two of those stocks, Franco-Nevada and Rio Tinto, are building cup bases.

"The charts, as interpreted by the legendary Larry Williams, suggest that the general public's giving up on gold en masse and he thinks that that makes it the perfect entry time to do some buying," the "Mad Money" host said.

The situation with markets could be pretty dire in the coming 6-12 months. We believe that we will have technical stagflation, where we might have employment declines while inflation rises. Rate hikes which won't be effective in changing the real supply side constraints, exacerbated by the Russia-Ukraine situation, are the reasons we foresee this economic outcome. Gold is not a bad asset in these times based on historical precedent, and is a natural hedge against the market jitters and corrections that will come with the possible demonstration of impotent monetary authorities. People should be considering gold exposures right now given the range of economic exogenous factors introduced by war and migration, as well as market risks related to the inflationary dynamics we were seeing prior to the Russian invasion.

In past U.S. recessions, the Federal Reserve would lower interest rates and hopefully weaken the U.S. dollar in an effort to encourage domestic consumption and make it less expensive to export U.S. goods. However, because the Federal Reserve's priority No. 1 is lowering inflation, not preventing a recession, the dollar could remain strong for the foreseeable future. A strong dollar is arguably the biggest headwind holding gold back right now.

Many investors may feel that beaten-down stocks are a better buy now than gold. They are probably right. Gold may be down 18% from its high, but there are plenty of top stocks that are down well over 50%. Even several well-known Dow Jones Industrial Average components, such as Nike, Home Depot, and Salesforce are all down between 30% and 53% from their all-time highs.

Warren Buffett has long said that gold is a bad investment because its growth prospects are limited to supply and demand, rather than a company that can grow with innovation and good management. By keeping cash on the sidelines or buying gold now, an investor essentially says investing in gold is a better use of capital than a different asset.

Despite all the cons discussed, now could be the perfect time to add a bit of gold to a diversified portfolio, especially if that portfolio is in need of lower-risk assets. Aside from the drawdown in price, gold could be the ideal investment for a prolonged recession, ongoing economic weakness, and could even rebound if the U.S. dollar begins to weaken.

While it may be tempting to buy shares in a gold mining stock that is down even more from its high, the simplest and safest way to buy gold is to go with an exchange-traded fund (ETF) such as the SPDR Gold Shares (GLD 0.90%) ETF or the iShares Gold Trust (IAU 0.89%). Both of these ETFs are at 52-week lows and are meant to track the price of gold by holding insured physical gold in a trust. The SPDR Gold Shares ETF has an expense ratio of just 0.4%, and the iShares Gold Trust offers an even lower 0.25% expense ratio -- which is a much better and more liquid alternative than buying physical gold bars and paying a hefty premium above spot.

Investing in gold, whether the physical metal or gold-related securities, is a complicated decision and not one to enter lightly. If you do decide to purchase physical gold, make certain you are buying from a reputable dealer. If you are purchasing gold for your retirement account, you must use a broker to buy and a custodian to hold your gold.

As a general rule of thumb, financial experts often suggest that you not have more than a small percentage of your assets in gold. This is believed to be good advice because it acts as an insurance policy. If you lose all other stocks in a crash, your gold should follow historical trends and go up in value, keeping you from losing everything. But remember, that's not guaranteed, so proceed with caution when buying this precious metal.

From the average investor or trader's standpoint, buying GLD shares is the same thing as buying gold. GLD shares will replicate exposure to gold prices, minus expenses related to storing the gold and trading GLD shares. However, it is important to understand that GLD shares do not give you ownership of physical gold. You can't trade in your GLD shares for the gold bars, for example.

Buying gold in Turkey, especially gold jewelry, is gaining massive popularity right now with the amazing conversion rate against the declining Turkish Lira and the ability for consumers to purchase directly from sellers without a middleman.

It is essential to check the weight of the actual gold item that you are buying. Since other gemstones, materials, or enamel colors can make the weight heavier, you might end up paying a higher price for less gold!

We did the research for this article while being guests in Istanbul with Go Türkiye. While the tourism board graciously hosted our stay, our itinerary and elective activities, such as gold shopping, were on our own budget. Our ideas, opinions, and recommendations remain our own.

Gold does a tremendous job of storing value, and this value is universal. That means no matter where you go on earth, the precious metal is worth just as much. This is a major benefit over fiat currency and why many people feel that buying gold right now is always a good choice.

Of course, not everyone has the same investment goals. Plenty of people want massive short-term gains rather than long-term value. If you fall into this category, buying silver bullion or other precious metals with more volatility may be right up your alley.

An incredibly treasured precious metal, a safe haven, and a hedge against inflation, it comes as no surprise that gold is one of the most admired metals by people all over the world. However, a question that is often asked by people who are thinking of putting their money somewhere is whether or not this is the right time to buy gold.

Compared to other assets, gold tends to maintain its value and its prices may move higher or lower according to global political and economic events. Gold is a store of value and an asset that generates a capital gain over the long term. When buying gold, you will have to take into account the current global political scenario as well as future forecasts issued by reputable institutions and experts.

Dedicate between 10-20% of your overall portfolio to safe-haven assets like gold, as it is a stable store of value, is ideal for long-term saving purposes, and helps hedge against inflation and minimize losses from other riskier investments such as stocks. A fall in the stock market performance brings a subsequent rise in the price of gold, thereby helping in mitigating losses.

"If the market bought into the idea that we were getting a disinflationary shock and we were to price in a larger element of rate cuts into the second half of next year, that would be the trigger for a very extended dollar market to start reducing some of those positions. We could see a risk-on rally in equities into the year-end, and gold would follow that trend."

Around 90% of people trade gold in U.S. dollars, but if investors want to become more niche, then they need to look into buying gold in the weakest currency and shorting it in the strongest currency, according to Weston.

That is one of the reasons why gold has been underperforming in U.S. dollars relative to some of the other currencies. "If you get this right, you can max out the currency effect on the back of this," Weston said.

The war between Russia and Ukraine has sparked industry records from gas to gold to wheat prices and almost everything in between. This conflict is driving tangible goods upwards. Selling your gold bullion is a good idea right now to maximize your profits.

Bargains are to be made on making charges as well - these are the design charges added to the gold rate when buying an item of jewellery. This charge is calculated a percentage of the weight price of gold and can go as high as 18 per cent on pieces with a lot of design work.

Gold bars can range anywhere in size from one gram up to 400 ounces, while most coins are found in one ounce and fractional sizes. Like other precious metals, physical gold is regarded by some as a good way to protect themselves against the ongoing devaluation of fiat currencies and from volatile stock markets. Buying gold certificates is another way to invest in the metal. A gold certificate is basically a piece of paper stating that you own a specified amount of gold stored at an off-site location. This is different from owning bullion unencumbered and outright because you are never actually taking physical ownership of the gold. While some investors enjoy the ease of buying paper gold, some prefer to see and hold their precious metals first-hand. 041b061a72


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