Gold prices hit a new record high: 5 moves to make now

Thanks to a new surge in value, the glittering allure of gold is once again capturing the attention of investors. After hovering near $2,300 an ounce earlier this month, gold prices have been climbing over the last few days, and the price of gold is now sitting at $2,439.98 per ounce (as of May 20, 2024). That’s up by over 14% from the under-$2,100 per ounce price we saw in March — and is a new record-high for the precious metal.

This new rise in gold prices is due to a convergence of factors, including still-high inflation and ongoing geopolitical tensions. As the economy is impacted by these and other uncertainties, the price is being pushed higher by increased demand from investors who are seeking refuge in the time-honored stability of gold.

These factors, in addition to the precious metal’s scarcity and inherent value, have made it an attractive investment option in today’s uncertain economic environment. And, now that gold is sitting at a new record high, even more investors are trying to capitalize on this potentially lucrative opportunity. If you want to join them, there are a few strategic moves you may want to consider making right now.

Find out how you can benefit from the current uptick in gold prices here.

Gold prices have hit a new record high: 5 moves to make now

There are a few moves you may want to make now that gold’s price has hit a new record, including:

Add gold bullion to your portfolio

As gold prices shatter records, owning the physical metal itself can be an attractive option. By purchasing gold bars or coins, you directly own a tangible asset that can serve as a hedge against issues like economic uncertainty and inflation. This form of investment also offers a sense of security and control over your assets, which is an attractive feature for many. 

Gold bullion is also highly liquid, so you can easily sell your gold bars or coins to capitalize on future price increases. However, it’s crucial to act quickly if you want to take this route, as gold is a finite resource, and demand for physical gold tends to rise during periods of elevated prices, which could potentially lead to supply shortages and even higher premiums.

Explore your best gold investing options and get started now.

Prepare for retirement with a gold IRA

You may also want to consider allocating a portion of your retirement savings to the precious metal through a gold individual retirement account (IRA). These self-directed IRAs allow you to hold physical gold and other approved precious metals within a tax-advantaged account. Not only will this offer you the same benefits you’d get from simply owning gold bullion, but the right gold IRA can also provide a hedge against economic turbulence and diversify your retirement portfolio. 

However, it’s worth noting that you should work with a reputable custodian to set up and manage your gold IRA. That way, you can ensure that it meets the requirements set by the IRS, allowing you to avoid unwelcome (and potentially expensive) surprises in the future.

Invest in the right gold ETFs

For those seeking liquidity and convenience, gold exchange-traded funds (ETFs) present an appealing opportunity to capitalize on the record-breaking gold prices we’re seeing right now. These funds, traded on major exchanges, allow you to gain exposure to gold without the need for physical storage. And, as gold prices continue to soar, gold ETFs offer the flexibility you need to buy and sell shares, enabling you to quickly adjust your positions and potentially lock in future gains.

Consider buying shares of gold mining stocks

Investing in shares of gold mining companies presents an indirect but potentially lucrative way to benefit from today’s soaring gold prices. That’s because, when gold prices rise, it directly increases the profit margins for the companies that mine the precious metal, as their primary product becomes more valuable. And with gold now fetching prices above $2,400 per ounce, even marginal increases in production or efficiency can translate into substantial earnings growth for these companies.

Rising gold prices can also fuel increased exploration and development activities within the mining industry, as companies seek to capitalize on the heightened demand and favorable market conditions. This can lead to new discoveries, expanded operations and increased reserves, further driving valuations upward — and making gold stocks a potentially lucrative addition to your portfolio.

Weigh the benefits of gold futures and options

If you’re an experienced and risk-tolerant investor, gold futures and options contracts can offer you a unique opportunity to capitalize on the record-breaking gold prices through leveraged exposure. The appeal of gold futures and options lies in their ability to provide outsized returns when gold prices are surging, but even modest price increases can translate into substantial profits for those holding leveraged positions.

For example, futures contracts, which are agreements to buy or sell gold at a predetermined price on a future date, allow you to speculate on the direction of gold prices without owning the physical metal. When gold prices are climbing, buying futures contracts can magnify your potential gains, as a relatively small investment can control a larger position in the underlying asset. Similarly, options contracts, which grant the right (but not the obligation) to buy or sell gold at a specific price within a certain timeframe, offer leveraged exposure to gold price movements. Call options increase in value as gold prices rise, providing you with the opportunity to participate in the upside potential while limiting your downside risk to the premium paid for the option.

The bottom line

As gold prices continue to soar, the allure of this precious metal remains undeniable. Regardless of the investment strategy you choose, though, it is crucial to exercise caution and conduct thorough research before committing your capital. Gold investments, like any other asset class, carry inherent risks, and it is essential to diversify your portfolio and align your investments with your overall financial goals and risk tolerance to ensure that you’re making the best moves for your money.