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Gold prices are cooling. Should you invest now?

Regardless of short-term price trends, gold is a good inflation hedge and diversifier for your portfolio. Chris Ratcliffe/Bloomberg

Coming off of several weeks of sustained high prices, the value of gold today is lower than it's been since late March. After surging above $2,000 per ounce in April and nearly topping all-time high prices after the Fed's latest rate hike earlier in May, gold prices today are back to around $1,960 per ounce.

There are a few factors that could play into the decline. For one, the value of the dollar reached a two-month high after inflation showed signs of cooling this week, according to Barron's data. And while the likelihood of a coming U.S. debt default had some investors seeking out the security of gold earlier this month, progress in talks between Washington leaders may have some feeling less urgent.

But if you're thinking about investing in gold as a safe haven against a looming recession or as a hedge against the still-ongoing effects of inflation, is now still a good time to buy in?

As many investors know, fluctuations are to be expected in any market — including gold. What's more, the precious metal has a long-standing reputation for its ability to store value over time. Here's what to know about the benefits of investing in gold today.

Start exploring your gold investment options with a free information kit now.

Why now is still a good time to invest in gold

Despite gold prices cooling slightly this week, gold can make a solid addition to your portfolio — and now could still be a great time to invest. Here are a few reasons why:

The outlook is still positive

Prices may be down slightly today, but many experts don't expect that to turn into a long-term trend. Just this week, a number of investment strategists reported a positive outlook for gold over the next year and further.

In a report on Monday, the Wells Fargo Investment Institute predicted that gold's rally could extend to 2024. They cite the looming potential for a global recession and sticky inflation as two reasons "gold and other precious metals should continue to march higher."

Similarly, strategists at the UBS Chief Investment Office published a report Thursday expressing confidence in gold's value this year despite this week's losses. "The yellow metal remains 8.2% higher since the start of this year, and we think it's likely to break its all-time high later this year with multiple mid- to longer-term drivers," the report reads.

Learn more about how gold can fit within your portfolio with a free investors kit.

Gold can help you diversify

Regardless of what's going on in the current marketplace, gold can make a solid addition to your portfolio anytime as a method of diversification.

While traditional investments, like stocks, offer much more potential for long-term growth, they're also risky. Putting a portion of your money in a more relatively stable asset like gold can help you weather more volatile periods in the stock market, which tends to happen during recessions. 

With a small allocation — experts tend to recommend around 5% to 10% — to a stabilizing asset like gold, alongside investments designed for growth, you can potentially maximize your investment strategy over the long run.

It's a liquid investment

Unlike some other investment types, gold is highly liquid. Thanks to its centuries-long reputation as a store of value and ongoing strong purchasing power, gold is one of the easiest assets to sell if you ever need to.

Whether you buy physical gold — like gold bullion or even jewelry — or you invest in a gold IRA or gold ETF, you can benefit from the ability to convert it to cash if you need to or you want to use the money toward another investment option. 

See if gold investing could be right for you today with a free investment guide.

The bottom line

Gold prices may be slightly lower today than they were earlier this month, but that doesn't mean your investment will suffer dramatically. In fact, many experts believe gold's price hasn't yet reached the peak investors may see later this year or next. 

Beyond how gold prices may trend currently, there are also long-standing benefits to adding the precious metal to your portfolio. Whether you're looking for a way to hedge against inflation, even while prices cool, or want to diversify against a coming recession, gold can be a good option for added stability and liquidity over time.

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