Gold pellets at the non-ferrous metal plant in Krasnoyarsk, Russia, one of the world’s largest precious metal plants.
Photo: REUTERS/ SCANPIX/ SEARCH
Gold has always been sought after by investors at all times because it is stable even in the face of turbulent markets and economic conditions. In essence, this means that gold often does not experience large fluctuations in the stock market, but over time, gold has shown a stable increase in value, cbsnews.com writes.
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Over the past few years, gold prices have hit all-time highs and stayed close to them as inflation worries, recession worries and, more recently, bank failures have led to a loss of confidence in the US dollar.
Under these circumstances, it helps to understand more about the high price of gold and what it means for gold investors.
Are current gold prices high? Yes, the price of gold is high right now – but it’s always been that way, given the situation at the time.
According to the World Gold Council, the price of gold reached a peak of $2,067 per ounce in August 2021. Since then, the price has fluctuated between $1,700 and $2,000, before rising again to $2,048 an ounce in mid-April 2023.
More broadly, gold prices have risen over the past two decades. In 2000, that price was around $300 an ounce, making today’s price more than 500% of what it was two decades ago.
However, other factors are also important to consider. First, these prices do not take into account changes in inflation over the period. In addition, other markets have also grown.
What today’s gold prices mean for investors
Although the price of gold is very high today compared to the past, some experts believe that due to such global economic conditions, it could continue to rise in the coming year.
First, many Americans are still feeling the effects of the uncertainty in the banking sector since the beginning of the year. Also, while high interest rates have shown positive signs against inflation, federal data show prices remain high in categories ranging from transportation and housing to food and travel.
“The price of gold has increased recently as a direct result of the dollar’s weakness,” says Dan Casey, investment advisor and founder of Bridgeriver Advisors. “The recent banking crisis caused investors to lose faith in the US dollar. There are always inflationary pressures in the background, and investors feel that inflation will undermine our currency, forcing more money to be invested in gold.”
Since gold prices tend to be inversely related to the value of the dollar, this uncertainty may mean that gold prices are yet to rise.
As with any investment, timing the purchase of stocks is usually difficult. Gold can always be a stable way to store value during periods of volatility. For the portal, experts advise that diversifying your assets by investing in gold can be useful, but maintaining traditional investments in stocks, bonds and funds can help increase your investment over time.
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2023-04-29 15:28:16
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