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How to benefit from gold investing right now

Gold can help provide stability in an uncertain economic environment. Getty Images/iStockphoto

This year, many investors may be feeling plagued by ongoing inflated prices, high interest rates and a volatile stock market.

While uncertainty can come and go, you can benefit from securing your investment portfolio to best weather any storms ahead. That's one reason why gold is a popular investment option. It's appealing as a portfolio diversifier as well as a hedge against inflation and counterbalance to more tumultuous markets.

If you're considering adding gold as an investment, start by comparing gold options

How to benefit from gold right now

Here are a couple of reasons you could benefit from investing in gold today:

Diversify your portfolio

Diversification is one of the best ways to protect your investments over the long term. And a great way to diversify is with asset types that tend to react differently from each other over time.

Gold is commonly sought-after by uncertain investors, thanks to its often inverse performance to other types of assets. Take last year, for example. While stock prices went down on the whole — the S&P 500 index fell by about 19% over the year — gold prices remained steady over the same period.

Not every year will look like 2022, and the stock market's potential highs can help boost your portfolio over the long run. But diversification helps you weather periods when traditional markets are down.

"Rising concerns around the economy is becoming an increasing risk," says Samuel Leach, an investing expert and founder of Samuel & Co. Trading, pointing to factors like rising interest rates and stock market turbulence. 

If you're worried about economic uncertainty today, then start exploring your gold investing options here.

Stability amid inflation

Not only are the markets volatile, but inflation has kept prices up over the past year. And though data shows consumers are feeling relief in some areas, everything from utilities to food remains high.

Inflation also causes a decline in the value of the dollar, since its buying power goes down. Think, for example, about the last time you went to the grocery store and it cost more to buy a carton of eggs than the time before, or prices at the gas pump were up by more than a few cents. 

There's one bright spot amid ongoing price pressures for some investors, though. Gold prices tend to do well even as the value of the dollar falls during inflationary periods. In fact, gold prices today are near their all-time high.

Consider the relationship between the price of the dollar and the price of gold over the past six months. Driven by bank failures earlier this year, high inflation and interest rates, the dollar's price value has fallen by around 9%, while gold has risen by about 20% in the same period.

While the value of gold can drop over time too, its price stability generally makes it a good hedge against the current inflationary economic environment. 

The bottom line

Uncertain economic times can lead many investors to consider the stability of an investment like gold.

Gold could make sense for your portfolio and overall financial plan if you're looking for a way to diversify and weather ongoing inflation and volatility. There are plenty of ways to invest, too. Gold IRAs and gold ETFs are two common investment options, but you may also choose to hold physical gold bullion or gold futures.

Before making any new investment, consider how it may affect your long-term goals. Learn more about investing in gold with a free information kit.

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