Adding 1-ounce gold bars to your investment portfolio could make a lot of sense this year.
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Given how quickly the investment landscape can shift, investors are constantly seeking ways to diversify their portfolios and safeguard their wealth against economic uncertainties. Otherwise, they would leave themselves open to serious vulnerabilities within their portfolios — the type that can have a big, and negative, impact on the value of their investments.
And, one avenue that has perennially captured the imagination of investors is precious metals, with gold being a standout choice. Part of the allure is that gold has long been revered as a safe-haven asset, appreciated for its intrinsic value and ability to preserve wealth. And, throughout history, gold has weathered economic downturns, geopolitical tensions and currency fluctuations, emerging as a reliable store of value. That’s a large part of why, in times of uncertainty, investors will turn to gold to mitigate risk and provide stability to their portfolios.
There are numerous types of gold investments to choose from, too — from gold bars and coins to gold stocks, gold ETFs and gold IRAs. But 1-ounce gold bars in particular have gained popularity for their accessibility and versatility — and these days, even Costco sells 1-ounce gold bars to its members. Are 1-ounce gold bars still a sound investment choice in 2024, though? Let’s find out.
In general, 1-ounce gold bars hold a unique position in the realm of gold investments. And, there are a few reasons it could make sense to invest in 1-ounce gold bars this year, including:
Liquidity and accessibility
One of the key advantages of 1-ounce gold bars is that they’re highly liquid. As a standard unit, these bars are easily tradable on various financial markets. Investors can buy and sell 1-ounce gold bars with relative ease, providing a level of liquidity that larger gold bars or other forms of gold may not offer.
And 1-ounce gold bars are accessible to a broader range of investors due to their lower price point compared to other options. For example, larger gold bars may require significant capital outlays, but 1-ounce bars allow investors with varying budget sizes to participate in gold investments. This accessibility democratizes gold ownership, making it inclusive for a diverse set of investors.
As we navigate the economic landscape of 2024, concerns about inflation and global uncertainties are at the forefront — and for good reason. While it appeared in late 2023 that the inflation issues had been somewhat tempered by the Federal Reserve’s rate hikes, the most recent report showed a slight uptick in the inflation rate. And, while that could be an anomaly, it may not be — so there are uncertainties to consider with the current economic state.
But gold, including 1-ounce gold bars, has traditionally served as a hedge against inflation, so it can be a smart investment in 2024. The precious metal tends to retain its value or appreciate during periods of rising inflation, acting as a counterbalance to the eroding purchasing power of regular currencies.
Moreover, in times of economic turmoil or geopolitical unrest, gold tends to shine as a safe-haven asset. The inherent stability and universal acceptance of gold make 1-ounce bars an attractive option for investors seeking refuge from market volatility.
Storage and portability
The practicality of storing and transporting 1-ounce gold bars also contributes to the popularity of this type of gold asset. Unlike larger gold bars that may require specialized storage facilities, 1-ounce bars can be stored in smaller, more secure spaces such as safe deposit boxes. Their compact size also makes them easily transportable, allowing investors to move their wealth as needed.
Risks and considerations when investing in 1-ounce gold bars
While 1-ounce gold bars present compelling advantages, it’s essential to also be aware of the potential risks that come with this type of investing. While gold tends to retain its value over time — and while the price of gold has historically increased — like any investment, the value of gold can fluctuate, influenced by market forces, economic conditions and geopolitical events.
Additionally, the transaction costs and premiums associated with buying and selling gold should be taken into account to ensure that it’s the right move for your portfolio. Unlike other types of investment assets, like traditional stocks or ETFs, you’ll need to contend with expenses like storage or insurance when purchasing 1-ounce gold bars, which can increase the cost of investing in this precious metal.
Furthermore, the opportunity cost of investing in gold should be weighed against other investment options. In a diverse portfolio, gold can play a valuable role, but it’s crucial to consider individual financial goals, risk tolerance and the overall investment strategy before making any decisions.
The bottom line
As we close out the first month of 2024, 1-ounce gold bars continue to be a viable and attractive option for investors looking to enhance their portfolios. The historical resilience of gold, coupled with the practical advantages of 1-ounce bars, makes them a versatile choice in an ever-changing economic landscape. Whether as a hedge against inflation, a safe-haven asset during uncertain times or a component of a diversified portfolio, 1-ounce gold bars offer investors a tangible and accessible pathway to a store of value.
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 The Simple Dollar, Interest, HousingWire and other financial publications.
TORONTO – Canada’s main stock index was higher in late-morning trading, helped by strength in energy stocks, while U.S. stock markets also moved up.
The S&P/TSX composite index was up 34.91 points at 23,736.98.
In New York, the Dow Jones industrial average was up 178.05 points at 41,800.13. The S&P 500 index was up 28.38 points at 5,661.47, while the Nasdaq composite was up 133.17 points at 17,725.30.
The Canadian dollar traded for 73.56 cents US compared with 73.57 cents US on Monday.
The November crude oil contract was up 68 cents at US$69.70 per barrel and the October natural gas contract was up three cents at US$2.40 per mmBTU.
The December gold contract was down US$7.80 at US$2,601.10 an ounce and the December copper contract was up a penny at US$4.28 a pound.
This report by The Canadian Press was first published Sept. 17, 2024.
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.
