Gold has been a valuable investment and a form of currency for centuries, offering unique benefits to investors. It’s no wonder that many individuals choose to include gold in their investment portfolios. However, timing is crucial when it comes to purchasing assets, and understanding an asset’s historical performance is essential. In this article, we will examine how the price of gold has changed over the past year and explain why now may be an opportune time to buy.
How the Price of Gold Has Changed in the Past Year
According to American Hartford Gold, the price of gold has risen from $1,834.39 to $2,019.38 per ounce in the last year. This represents a gain of $184.99 per ounce or an increase in value of approximately 10.08%. However, like any investment asset, the value of gold fluctuates. The past year has witnessed both highs and lows in gold prices.
For instance, in late February 2023, the price of gold hit a low of $1,811.06 per ounce. However, it quickly rebounded, reaching $2,039.97 per ounce in early March and peaking at $2,052.04 per ounce on May 3, 2023. Throughout the year, gold continued to fluctuate, dropping to just above $1,800 per ounce by October 2023. Fortunately, the value of gold recovered, reaching a high of $2,079.47 per ounce on December 27, 2023.
Why You Should Buy Gold Now
If you are considering adding gold to your investment portfolio, now may be an ideal time to do so. Here are a few reasons why:
Prices are Low and Could Grow Ahead
While gold prices reached a one-year high in late December, they have since fallen by approximately $60.09 per ounce or about 2.89%. As a result, the current price of gold is relatively low. However, it is important to note that gold prices are likely to rise in the near future. By purchasing gold now, you may be able to benefit from the potential increase in value when the price rebounds.
Inflation is Still a Cause for Concern
Gold prices tend to rise during inflationary periods, such as the one we are currently experiencing. Although inflation has been somewhat tempered compared to the height of the pandemic, the most recent inflation report indicates that it is still higher than the Federal Reserve’s target rate. In times of high inflation, investors often turn to gold to preserve the value of their portfolios. This increased demand for gold typically leads to a rise in its price.
Gold is a Diversification Tool
Diversifying your investment portfolio is a wise strategy to mitigate risks associated with potential losses. Gold serves as an excellent diversification tool because it is not closely correlated with traditional investment assets like stocks and bonds. When market conditions are uncertain or expected to decline, gold can help mitigate the risk of losses from other assets. In other words, when the stock market declines, the price of gold usually rises, reducing the overall losses caused by underperforming stocks.
The Bottom Line
Over the past year, the price of gold has grown by more than 10%, and there is a possibility for further increase in the future. Adding gold to your investment portfolio can protect it from market swings and inflationary pressures. By taking advantage of the current relatively low prices, you can position yourself to benefit from potential future gains. Consider including gold in your investment strategy today and enjoy the advantages it offers as a diversification tool and a hedge against inflation.