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3 smart gold investing moves to make with inflation rising

With inflation rising again, many investors should consider turning to gold.  Getty Images

At the start of 2024, many Americans were optimistic that inflation was permanently cooling and relief would soon be on the horizon. Unfortunately, that hasn't been the case in the first quarter of the year, with inflation reports in January, February and March disappointing for many. Now, after inflation increased in the last two months, many are wondering if interest rate cuts will come at all this year. But what should investors do amid this uncertainty?

Many have turned to gold. Investing in the precious metal hit an 11-year high last September. Due to the portfolio diversification it can offer and the traditional hedge against inflation it can act as, it's understandable why many have turned to gold. And the price of the yellow metal has surged, breaking multiple records in the last few weeks.

To get the most of out a potential gold investment now, however, investors should take certain steps. Below, we'll break down three smart gold investing moves to make with inflation rising.

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3 smart gold investing moves to make with inflation rising

Here are three moves investors should consider making today with inflation still problematic.

Get started

You can't obtain the benefits of gold without first being invested, so don't hesitate to get started now. The price of gold has risen by hundreds of dollars in the past month and currently sits at $2,332.18 per ounce. So if you wait much longer, the price could become prohibitive and you may wind up getting priced out. Plus, with inflation as high as it's been, it makes sense to add a timely benefit to your portfolio now to offset the corrosive effects inflation may have had on some of your other assets.

Get started by exploring your top gold options online.

Understand what gold can (and can't do)

To reap the benefits of any investment it's vital to understand what it can and can't do. This is particularly true for alternative assets like gold. While gold can be an effective hedge against inflation by maintaining its value when inflation erodes the purchasing power of your money — and it can diversify a portfolio otherwise made of stocks and bonds — it's not a traditional income-producing investment. So don't invest expecting to make a quick profit. While that could, in theory, happen now with the price volatility, it's not something that investors should consider as a feature of their gold investment.

Don't overinvest

While gold is a smart investment right now, investors should understand that there's a limit to how much they can benefit from the precious metal. Many experts advise limiting a gold investment to 10% or less of your overall portfolio, thus allowing other assets like stocks and bonds to grow as needed. The range between 1% and 10% of your portfolio, however, will depend on your specific investor profile and your long-term goals. Just be careful not to overinvest, as the benefits of gold could overshadow other income-producing assets.

The bottom line

With inflation on the rise again and investors looking for some additional ways to grow and protect their money, many may want to turn to gold now. It makes sense to get started quickly as the price is rising and, without it, your portfolio could more negatively be impacted by inflation. Just make sure to understand the income-producing ability of gold and don't be tempted to overinvest. But by making these three smart moves today investors will improve their chances of gold success, both now and in the months to come. 

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