This morning, Wednesday 19 June, gold prices showed an uncertain trend. The spot price of gold recorded a slight increase of 0.01%, reaching $2,329.58 per ounce. At the same time, the contract for delivery in August recorded a decline of 0.17%, settling at $2,343.
But is it still worth investing in this safe haven asset?
Gold remains a stable store of value
Despite slight variations, gold continues to represent a stable store of value for investors. The slight growth in the spot price reflects constant demand and solid confidence in this precious metal, considered a safe haven in times of economic uncertainty.
The “constant demand” indicates that there is a continuous flow of gold purchases. Even if the price of gold is not rising rapidly, the fact that it remains stable or rises slightly suggests that there are always investors ready to buy it. This may be due to various factors such as inflation, political or economic instability, or other financial concerns.
The “solid trust” it means that investors have a positive and confident perception of gold as an investment. Despite price changes, there is a widespread belief that gold will maintain its value over time.
Not by chance gold continues to be considered a “safe haven” asseti.e. among those investments that tend to maintain their value or even increase when financial markets are volatile or declining.
So, when the spot price of gold rises slightly, it means that investors continue to buy gold although the price is not increasing significantly. This behavior is driven by the confidence that gold is a safe investment that will protect their capital in times of economic uncertainty. The price of gold tends to reflect this confidence and constant demand, either maintaining some stability or slowly increasing its value.
Market trends and forecasts
The contrasting trend between the spot price and the contract for August could indicate different investor expectations in the short term compared to the medium term. While the spot price benefits from a slight increase, the decline in the contract for August could suggest a investor caution regarding future economic conditions.
However, gold, influenced by monetary policies, interest rates and the strength of the dollar, continues to be a key indicator of global financial stability. Recent decisions by the Federal Reserve and other central banks regarding interest rates can have significant effects on gold prices. A maintenance or reduction in rates tends to make gold more attractive as an investment.
Is it still worth investing in gold?
Investing in gold can still be convenient, but the decision it depends on several factors personal and market. Here are some factors to evaluate:
Gold is often seen as a hedge against inflation. If inflation continues to rise, then, gold can help preserve the value of your capital.
In times of economic uncertainty or geopolitical instability, gold tends to maintain or increase its value, making it a safe investment.
- Portfolio diversification and risk reduction
Adding gold to your portfolio can reduce overall risk due to its low correlation to other assets such as stocks and bonds. If financial markets become volatile, gold can provide additional stability.
In a low interest rate environment, gold tends to be more attractive because the opportunity cost of holding gold (which does not earn interest) is low.
- Possible Rate Increases
If interest rates were to rise, gold’s attractiveness could decline as interest-yielding investments become more competitive.
- Current Price, buying and selling
Currently, gold is at $2,329.58 an ounce. Monitoring the trend and movements of the price of gold can help you decide when to enter or exit the market. In any case, however, you must always consider the costs associated with buying and selling gold, including sellers’ margins and commissions.
Those who purchase physical gold will also have to consider storage and insurance costs. Conversely, investing in gold ETFs or other financial instruments can reduce these costs.
- Investment time horizon
In the case of a short term investmenti.e. if you are looking for quick gains, gold may not be the ideal investment, as its price can be volatile in the short term. In fact, gold tends to maintain its value in the long term, making it a good choice for those seeking stability and protection long term.
How much do you earn by investing in gold
The profit from investing in gold can vary widely based on several factorsincluding the time period, global economic conditions, and supply and demand dynamics.
Historically, gold has tended to increase in value over the long term. For example, over the past 20 years, the price of gold has increased significantly, rising from around $300 per ounce in the early 2000s to over $2,300 per ounce in 2024.
However, lGold can be volatile in the short term, with price changes influenced by economic, geopolitical events and central bank decisions. Additionally, it is often considered a hedge against inflation. As a result, during periods of high inflation, gold tends to maintain or increase in value.
Generally speaking, for short-term gains, those who buy gold when the price is low and sell it when it is high can achieve significant and measurable gains (for example, those who buy gold at $1,500 an ounce and sell it at $2,300 dollars per ounce, realizes a profit of $800 per ounce, equal to an increase of 53%). Investing for the long termHowever, gold can provide protection against the loss of purchasing power. Just to give an example, an investment made 20 years ago at $300 an ounce could now be worth $2,300 an ounce, with a profit of $2,000 per ounce, equal to 666% increase.
However, experts advise you to do not invest all your capital in gold, but to focus on a diversified strategy that includes gold and reduces the overall risk of the portfolio. Investing in gold periodically can also help average costs and reduce the impact of price volatility.
In this case, consult a financial advisoror it can help you determine the right amount of gold to include in your investment portfolio, as well as the strategy best suited to your needs and financial goals.
