For many seniors, an investment in gold can make sense now.
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With nagging inflation and interest rates meant to tame it the highest they’ve been in decades, it’s understandable if you’re looking for new and innovative ways to protect your money. This interest can be especially strong for seniors and older adults. This demographic is largely dependent on Social Security, retirement savings and income-producing investments. When those are tight – or underperforming like they may be now – it makes sense to explore some alternatives.
One such asset that can help is gold. In fact, investing in the precious, yellow metal hit an 11-year high earlier this year. There are multiple reasons why the investment is appealing now. However, as with all investments, the timing is key. And for many seniors the timing for a gold investment could be beneficial now, before the year is out.
Here are three major reasons why seniors should consider investing in gold before 2024.
Inflation is still problematic
There was some hope earlier this year that inflation was on a permanent decline. But then it ticked up in July and again in August. And it remained unchanged in September. And while the long-term forecast is generally favorable, comprehensive economic relief is still far off. Against this backdrop, then, seniors should consider a gold investment.
Gold can often hedge against inflation by remaining steady in value even when other assets look shaky. While not the income-producing asset that stocks and bonds are, gold also doesn’t (typically) come with the same volatility either. And that’s important for any economic climate but particularly now, and especially for seniors who may not have the ability to withstand the economic downturns that younger investors can.
With stubborn inflation comes higher interest rates. And if the Fed doesn’t make further progress of getting inflation down to their 2% target goal another rate hike is inevitable. With the benchmark rate already at a 22-year high of a range between 5.25% and 5.50% that will cause even more economic pain for borrowers. Not only will credit become even more expensive but the returns on other investments may underperform. Its in times like this, however, when gold tends to do best.
Data from NASDAQ underlines this argument. The 1970s, for example, began with an interest rate of around 6% but the decade ended with a rate around 14%. However, gold prices during that same decade rose from $35 to $850 per share.
The price of gold could increase soon
The price of gold today is just under $2,000 per ounce. That’s higher than the $1,820-$1,830 range from earlier this month but still lower than the approximate $2,050 it was in the spring. So the trajectory is moving upward and relatively quickly at that. So if you want to get in when gold prices are still reasonable – and hope to make a profit in a short period of time – now is a great time to invest in gold.
That said, remember that gold is less of an income-producing asset and more of a reliable way to diversify your portfolio and to keep your other assets protected. So while buying lower and selling higher is a potential advantage right now, it’s not the main benefit a gold investment can provide.
Timing is a key component of any investment. In the waning months of 2023 a gold investment for seniors can be advantageous. Gold can help in the battle against inflation and, historically, has often grown in value as interest rates rose. But the price of gold now is still lower than what it was a few months ago, although it could tick up again soon. By buying in now seniors can get the protection a gold investment provides with the potential for a rise in value to come not too far after.
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.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
