benefits of investing in gold

How Gold Can Enhance Your Portfolio’s Resilience

Gold maintains its centuries-old reputation as a reliable store of value. In 2024, investors are expected to continue to turn to gold to preserve their wealth and protect themselves against economic fluctuations and uncertainties.

Diversify your investment portfolio

The old adage is: don’t put all your eggs in one basket. With continued volatility in financial markets, gold offers valuable diversification. Its negative correlation with traditional financial investments helps reduce a portfolio’s overall risk, providing relative stability during periods of market turbulence. Generally, gold tends to increase in value when stocks, bonds and other assets fall.

Gold, like silver, also has the particularity of being a physical asset. Sold in the form of coins and bars, the precious metal differs from financial products such as stocks, bonds, ETFs or cryptocurrencies. Gold therefore remains a simpler asset to control given the complexity of these assets.

Furthermore, physical gold, is no one’s debt, therefore there is no risk of default, unlike products issued by governments or companies. Your capital is also preserved in the event of bankruptcy of the intermediary with whom you made your investment.

In addition, the yellow metal serves as a refuge against inflation. Investors seek to protect their purchasing power by allocating part of their portfolio to gold, which has historically maintained its value in the face of rising prices.

Protecting yourself against geopolitical risks

Uncertainties linked to geopolitical events in 2024 will strengthen gold’s position as a safe haven. International tensions, regional conflicts, and political changes can cause volatility in financial markets. Given the conflicts in Ukraine and the Middle East, geopolitical risks will remain high. This concerns in particular threats to the freedom of international trade and the price of raw materials. The phenomenon of uncertainty will be accentuated by the electoral deadlines in the United States at the end of the year.

In this context, gold is becoming more than ever an attractive asset, preserving the stability of investments. Companies and individuals attentive to these factors should integrate gold into their investment strategy to mitigate the adverse effects of global instability.

Protect yourself against economic uncertainties

In a global economic context marked by persistent concerns about inflation and currency depreciation, gold remains an instrument of protection against the loss of purchasing power.

Changes in global monetary policies may boost interest in gold as an alternative investment. Both the Fed and the ECB are now likely to cut rates early next year. This potential decline weighs particularly on the dollar. Since the precious metal’s market is denominated in the American currency, a decline in the greenback makes it less expensive for buyers using other currencies.

Another factor supporting gold is the potential for a slowdown in the global economy due to aggressive interest rate hikes by central banks around the world over the past 18 months.

Sustained demand

Sustained demand for gold, whether for jewelry, industry or investment, helps maintain the value of gold on international markets. The continued growth of emerging technologies, such as electronics and renewable energy, is driving industrial demand for precious metals.

At the same time, gold purchases by central banks around the world have reached a historic pace over the past two years. Thus, from 2022, this volume was the highest since 1967. This trend is expected to continue in 2024 due to geopolitical tensions and the economic climate.

Investing in gold is indeed a way for central banks to:

  • strengthen confidence in the stability of their balance sheet
  • guarantee the value of the currency issued
  • reduce their dependence on the dollar
  • fight against uncertainty

Liquidity of gold investments

Gold has an exchange value recognized throughout the world, and has done so for millennia. It therefore offers good liquidity, allowing investors to quickly convert their assets if necessary. This increased liquidity contributes to portfolio flexibility, providing investors with an investment option that is both stable and easily accessible.

There are different solutions for investing your savings in gold, including Gold IRAs. However, it is recommended to use a specialized and reputable company, whether for the purchase or secure storage of precious metals.

An good investment platform allows you to purchase gold (bars and coins) from refiners certified by the international market, which guarantees the authenticity, purity and quality of the products. The conditions for receiving and storing the precious metal are secured by trusted partners.

With a reputable Gold IRA company, precious metals are held in your own name, without an intermediary, and stored outside the banking system (with insurance).

There is never really a bad time to invest in gold. But 2024 could be the right year to take full advantage of the multiple advantages of the precious metal. By investing in gold, savers can better diversify their portfolios, thanks to a tangible asset that is easy to buy, store and sell. Additionally, safe-haven demand and central bank interest rate outlooks are expected to keep the gold price above $2,000 per ounce in 2024.