The Gold Rush of 2024: Is It Too Late to Invest?

The gold spot price reflects the current value of an ounce of gold on global markets, excluding additional costs for physical delivery. Buying spot gold today can be a good option for several reasons, depending on your risk tolerance and, above all, your investment objectives. Here are the major points to consider:

Reasons to Buy

1. Safe-Haven Asset: Gold is often regarded as a safe-haven investment during times of economic uncertainty, geopolitical tensions, and high inflation — conditions we’re currently experiencing. With central banks printing money to support their economies, the value of currency decreases, prompting investors to favour gold as a means of preserving purchasing power. In 2024, heightened international tensions also contributed to increased gold demand, explaining its remarkable price surge.
2. Interest Rate Impact: If central banks, like the Federal Reserve, lower interest rates, this could lead to higher gold prices, as yield less return. Many analysts expect further price increases in the short to medium term.
3. Price Projections: Initial projections for 2024 suggested gold could reach between $2,200 and $2,500 an ounce, but it has already surpassed that, with the spot price nearing $2,700 — an all-time high! Optimistic forecasts for 2025 suggest prices could reach up to $3,000.

Limitations to Consider

1. Price Volatility: While gold might go up in the long term, its price can be volatile due to fluctuations in the dollar, interest rates, and geopolitical developments, making forecasts somewhat unpredictable.
2. No Income Generation: Unlike stocks or bonds, gold does not pay dividends or interest. The main advantage lies in its inherent value, making it less suitable for those seeking quick gains.

Gold plays a major role in central bank reserves. In 2024, several countries, including China and Russia, increased their gold reserves to diversify their holdings, thereby boosting demand and supporting prices.

Should You Buy Gold?

Gold has traditionally been a popular investment, particularly in times of economic uncertainty. Deciding whether to buy gold depends on several factors, including your financial goals, risk tolerance, and market conditions. Here are some pros and cons to help guide your decision:

Pros of Buying Gold

1. Hedge Against Inflation: Gold often retains its value or even appreciates during inflationary periods, making it a good way to preserve purchasing power.
2. Safe-Haven Asset: Gold is considered a safe-haven asset, meaning it tends to hold its value during economic downturns or market volatility.
3. Diversification: Including gold in an investment portfolio can provide diversification since it often moves inversely to stocks and bonds.
4. High Liquidity: Gold is highly liquid, allowing investors to sell it relatively easily if they need cash.
5. Tangible Asset: Unlike stocks or bonds, gold is a physical asset, which some investors prefer as it feels more “secure.”

Gold spot remains a worthwhile asset for investors looking to safeguard against economic uncertainties. Although prices are currently at their peak, medium-term forecasts suggest that they will keep rising.

In short, investing in gold could be a wise decision if you aim to hedge your portfolio against inflation or economic instability without seeking immediate profits.