Gold prices are near record-highs: 4 reasons to invest now

Gold has been an alluring option for investors for hundreds of years and interest in the precious metal has continued to grow over time. For example, last year, gold investing hit an 11-year high as more and more investors flocked to the precious metal to take advantage of the unique benefits it offers. 

Given today's economic challenges, that recent growth makes sense. After all, gold helps to counteract the risk of losses to your portfolio from more volatile investments, like stocks. And, it can also help to protect your wealth when inflation impacts the value of traditional currencies.

Gold prices have been hovering near record highs this week, so we may see another uptick in interest soon. As of March 5, the spot price of gold hovered just above $2,100 per ounce — up from about $1,900 per ounce in mid-February. But while this new uptick in gold's spot price may drum up more interest from investors, is it really a good idea to buy gold right now? 

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Gold prices are near record-highs: 4 reasons to invest now

As gold prices hover near new highs, there are a few smart reasons you may want to consider investing in this precious metal. Here are four reasons to buy in now: 

Gold can act as a shelter during economic uncertainty

During times of economic uncertainty, many investors will turn to gold as a safe-haven asset for refuge from the volatility of traditional financial markets. That's because gold's value is not directly tied to economic indicators or government policies, which makes it a relatively stable store of wealth. 

During economic downturns or periods of currency devaluation, the demand for gold tends to rise, as it does not typically experience the same fluctuations as paper currency does. In turn, gold tends to have an enduring appeal as a shelter during turbulent economic times, making it a valuable part of any investment strategy.

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Gold can be used to diversify your portfolio

Successful investors tend to understand the importance of using diversification to mitigate risk. Gold, with its low correlation to traditional assets like stocks and bonds, coupled with its historical ability to act as a hedge in times of economic uncertainty, offers an effective means of diversifying your investment portfolio. 

While gold prices can experience short-term fluctuations, the value tends to grow steadily over time. So, if you wait for prices to drop, you could actually end up paying more to buy in and enhance the stability and longevity of your portfolio.

Gold helps to preserve wealth during inflationary periods

Today's inflation rate is a lot lower than it was at its peak in 2022. That said, we're not in the clear just yet. Right now, the inflation rate is 3.1% — higher than the Fed's goal of 2% — and, in turn, the need for an effective inflation hedge is paramount. That's where gold comes in.

In an economic environment where the purchasing power of traditional currencies may erode, gold can help to protect your wealth. So by investing in gold now, you're making a strategic move to safeguard your assets against the erosive effects of inflation while working toward long-term wealth preservation.

The uses for gold are growing

Gold is also being used in other ways outside of its historical role as an investment — adding to the value that this precious metal offers. For example, with more and more advancements being made in technology, gold's applications grow, stretching across electronics, healthcare and other cutting-edge technologies. 

This not only bolsters the industrial demand for gold but also underscores its relevance in the modern economy. By investing in gold, you can position yourself at the intersection of tradition and innovation, benefiting from gold's historical stability while taking advantage of the precious metal's role in technological advancements.

The bottom line

Gold prices are elevated right now, but that doesn't mean you should wait to buy in. If you've been considering a gold investment, it makes sense to add some of the precious metal to your portfolio now. After all, gold offers a number of unique benefits to investors, many of which are incredibly relevant in today's economic environment.