There are a few smart gold investing options worth looking at this year if you want to add the precious metal to your portfolio.
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The economic landscape consistently experiences shifts and changes, which is one reason why investors seek out reliable assets to safeguard their wealth. And gold, which has been hailed as a timeless store of value, has long been a preferred choice for investors who want to add stability and security to their portfolios.
As we step into 2024, the focus on finding stable and secure investments continues to be important. After all, there are looming questions regarding where the economy could be headed — and ongoing inflation issues, coupled with the current geopolitical climate, are only adding to the unknowns. So investors who want to be prepared for anything may want to emphasize gold investing in 2024.
But there are lots of different gold investing options to choose from — each with its own set of possible benefits and downsides to consider. So which gold assets merit consideration this year? Let’s find out.
If you’re thinking about adding gold to your investment portfolio this year, you may want to weigh the following options:
Physical gold
The traditional method of investing in gold involves acquiring physical gold in the form of gold bars and coins or similar assets. Investing in physical gold provides a sense of security, as investors have direct ownership over their gold. Coins like the American Gold Eagle or the South African Krugerrand are popular choices, but they aren’t the only ones. Costco and other big box stores are also selling gold bars to customers who are ready to invest in the precious metal, so it’s easy to buy physical gold these days.
However, there are some potential downsides to investing in physical gold. For example, investors should be mindful of storage costs, insurance costs and the potential for theft, which should be weighed against the potential benefits of this type of gold investing. And it’s also worth noting that buying and selling physical gold may involve higher transaction costs compared to other investment options.
Gold ETFs offer a convenient and cost-effective way to gain exposure to the precious metal without the need for physical possession — which cuts down on the costs by eliminating the need for storage and special insurance. These funds typically track the performance of gold prices and are traded on stock exchanges, providing liquidity to investors.
And, investors can buy and sell shares in gold ETFs just like stocks. Before investing in gold ETFs, though, it’s crucial to understand that there are other types of associated expenses, such as management fees, which can add to the overall costs of this type of investment.
Gold stocks
Investing in gold mining stocks allows investors to participate in the potential upside of gold prices while also benefiting from the profitability of mining companies. And, companies involved in the exploration, development and production of gold can be attractive investment opportunities.
However, it’s essential to recognize that gold stocks are subject to company-specific risks, such as operational challenges and geopolitical factors. That’s why conducting thorough research on individual mining companies is crucial before making investment decisions.
Gold futures and options
For more experienced investors, gold futures and options contracts provide a way to speculate on the future price movements of gold. These financial derivatives allow investors to leverage their positions, potentially magnifying both gains and losses.
Futures contracts involve an agreement to buy or sell gold at a predetermined price on a future date. Options, on the other hand, provide the right (but not the obligation) to buy or sell gold at a specified price within a certain timeframe.
Due to their complexity, these instruments are typically not recommended for novice investors — but can be a smart option to consider for more experienced investors, especially those with extensive gold investing experience.
Gold mutual funds
Gold mutual funds pool money from multiple investors to invest in a diversified portfolio of gold-related assets, including stocks of gold mining companies, physical gold and other related securities. Mutual funds provide diversification, reducing the risk associated with investing in a single asset or company.
However, like ETFs, investors should be aware of management fees and other expenses associated with mutual funds. Those types of fees can add significantly to the overall cost of investing, so it’s important to weigh the benefits against the costs before making a decision on whether it’s the right option for you.
Digital gold
As technology continues to advance, digital gold has emerged as a modern and accessible investment option. Digital gold investing platforms allow investors to buy, sell and hold physical gold digitally, and these services typically provide the convenience of fractional ownership, making gold accessible to investors with smaller budgets.
But while digital gold eliminates the need for physical storage, investors should carefully evaluate the security measures implemented by the platform before making any investments.
The bottom line
Gold remains a valuable asset for investors seeking stability and a hedge against economic uncertainties. The diverse range of gold investing options available in 2024 caters to investors with varying risk appetites and preferences. But whether you’re opting for physical gold, ETFs, mining stocks, futures, mutual funds or digital gold, it’s crucial for investors to conduct thorough research, understand the associated risks and align their investment choices with their financial goals and risk tolerance.
Angelica Leicht is senior editor for CBS’ Moneywatch: Managing Your Money, where she writes and edits articles on a range of personal finance topics. Angelica previously held editing roles at Bankrate, HousingWire and other financial publications.
TORONTO – Strength in the base metal and technology sectors helped Canada’s main stock index gain almost 100 points on Friday, while U.S. stock markets climbed to their best week of the year.
“It’s been almost a complete opposite or retracement of what we saw last week,” said Philip Petursson, chief investment strategist at IG Wealth Management.
In New York, the Dow Jones industrial average was up 297.01 points at 41,393.78. The S&P 500 index was up 30.26 points at 5,626.02, while the Nasdaq composite was up 114.30 points at 17,683.98.
The S&P/TSX composite index closed up 93.51 points at 23,568.65.
While last week saw a “healthy” pullback on weaker economic data, this week investors appeared to be buying the dip and hoping the central bank “comes to the rescue,” said Petursson.
Next week, the U.S. Federal Reserve is widely expected to cut its key interest rate for the first time in several years after it significantly hiked it to fight inflation.
But the magnitude of that first cut has been the subject of debate, and the market appears split on whether the cut will be a quarter of a percentage point or a larger half-point reduction.
Petursson thinks it’s clear the smaller cut is coming. Economic data recently hasn’t been great, but it hasn’t been that bad either, he said — and inflation may have come down significantly, but it’s not defeated just yet.
“I think they’re going to be very steady,” he said, with one small cut at each of their three decisions scheduled for the rest of 2024, and more into 2025.
“I don’t think there’s a sense of urgency on the part of the Fed that they have to do something immediately.
A larger cut could also send the wrong message to the markets, added Petursson: that the Fed made a mistake in waiting this long to cut, or that it’s seeing concerning signs in the economy.
It would also be “counter to what they’ve signaled,” he said.
More important than the cut — other than the new tone it sets — will be what Fed chair Jerome Powell has to say, according to Petursson.
“That’s going to be more important than the size of the cut itself,” he said.
In Canada, where the central bank has already cut three times, Petursson expects two more before the year is through.
“Here, the labour situation is worse than what we see in the United States,” he said.
The Canadian dollar traded for 73.61 cents US compared with 73.58 cents US on Thursday.
The October crude oil contract was down 32 cents at US$68.65 per barrel and the October natural gas contract was down five cents at US$2.31 per mmBTU.
The December gold contract was up US$30.10 at US$2,610.70 an ounce and the December copper contract was up four cents US$4.24 a pound.
— With files from The Associated Press
This report by The Canadian Press was first published Sept. 13, 2024.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
