The price of gold is falling. Is it the right time to buy in?

Gold has had an impressive year so far, outperforms many other assets over the past several months. Throughout 2024 the price of gold has consistently broken records and reached new record highs, largely driven by economic uncertainty, global instability and investor interest, underscoring its appeal as a reliable investment in turbulent times. On the eve of the US presidential election, the price per ounces sitting at $2,748just shy of its most recent high—and an increase of over 33% year to date.

But shortly after the election, the price of gold began to decline, falling by about $80 to about $2,669 per ounce. ounces. This post-election plunge, which marked a three-week low, surprised many investors and sparked speculation about what lies ahead for the gold price. While some investors may be wary of the price drop and see it as a sign of instability, others see it as a potential entry point.

This price drop raises an intriguing question: Is now the right time to buy into gold? Given its strong upward trajectory this year, today’s lower price may offer a strategic entry point, but there are many factors to consider. Below, we’ll break down what you need to consider.

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Should you buy gold as the price dips?

The short answer is yes – now would be a great time add gold to your portfolio. After all, gold has historically shown resilience and an ability to grow in value over time, especially during periods of economic uncertainty. Analysts predict that demand will continue to push prices higher, and some expect it reach $3,000 per ounces in the coming months. This makes today’s prices an attractive buying opportunity for both beginners and those who want to expand their gold holdings.

In addition to potential price growth, gold serves as a unique asset in a well-balanced portfolio. Gold is known for its diversification benefitsthat offer protection against downturns in other markets. For example, during economic crises or periods of inflation, gold often outperforms stocks and bonds. This characteristic makes it valuable in today’s environment where persistent inflation fears, potential interest rate adjustments and global tensions have caused volatility across multiple asset classes.

Investing in gold is now possible serve as an inflation hedge also for the future. While inflation is currently close to the US central bank’s 2 per centthere is always a chance that inflation could tick up unexpectedly again. If this happens, the price of goods and services increases and the purchasing power of cash decreases, but gold tends to retain its value. This ability to hedge has made gold particularly attractive in recent years. So if you are concerned about protecting your assets against future problems with inflation, adding gold can be a strategic move.

So are the central banks to strengthen their gold reserveswhich could help drive demand and further stabilize prices. Central banks have been consistent buyers of gold, both as a hedge and as a way to diversify their own reserves. In addition, industrial sector demand for gold – particularly in electronics and medical equipment – has remained robust, boosting demand. All these factors point to a positive long-term outlook for gold, making now a favorable time to invest, especially at a lower price.

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What gold assets make sense right now?

If you have decided to invest in gold, the next question to answer is: What type of gold asset makes the most sense? Here’s what you might want to consider investing in now:

• Physical Gold: Gold bars and coins offer a direct way to own gold without having to rely on market fluctuations from other investment instruments. Bullion provides a sense of security as it is an actual item that you can hold. Storage and insurance of physical gold can, however add to your costs.
• Gold ETFs: For more flexibility and convenience, gold exchange traded funds (ETFs) is a popular option. Gold ETFs allow investors to buy shares that represent ownership of an amount of gold without the need to manage or store physical gold. They too provide liquidity and generally comes at a lower cost than physical gold.
• Gold Mining Shares: Investment in gold mining companies offers exposure to the price performance of gold without buying the metal directly. When the price of gold rises, mining companies typically see increased profits, which can lead to higher share prices. However, gold mine holdings can also be volatile as they are affected by factors such as production costs.

Bottom line

Ultimately, the decision to buy gold should align with your financial goals, risk tolerance and investment strategy, but the recent decline in the price of gold presents a unique opportunity for investors. Given its impressive performance this year and its strong long-term outlook, now may be a strategic time to buy in at a lower price point. Whether you choose physical gold, gold ETFs or gold mining stocks, each type of gold asset offers unique benefits that can enhance your portfolio. And with its ability to hedge against inflation, provide diversification and serve as a safe haven in times of uncertainty, gold remains a wise choice for many investors.