Gold prices soar in 2024. Here’s how to join the gold rush

Not all that glitters is gold, but the value of the precious metal has increased this year.

Gold prices have broken record after recordrising more than 30% in 2024 and reaching an all-time high of $2,748.23 this week.

He The recent spectacular half-point interest rate cut by the Federal ReserveGeopolitical tensions and economic uncertainty surrounding the US presidential election have created the conditions for prices to skyrocket. The rally has been fueled by the central banks of China, India and Turkey reducing their reliance on the US dollar, as well as retail giant Costco stocking up on 1-ounce bars.

“Costco’s gold offering makes it as easy for a retail investor to buy gold as it is to buy household staples,” said Joseph Cavatoni, senior market strategist at the World Gold Council. “Buying gold has never been easier and accessible”.

While gold, which is typically invested as a hedge against inflation, has shined this year, there are many things to know before investors join the gold rush.

Why have gold?

Traders tend to flock to gold during periods of uncertainty, betting that its value will hold up better than other assets such as stocks, bonds and currencies if an economy faces a recession.

“Between 2008 and 2012, the value of gold increased dramatically, as evidenced by the 101.1 percent increase in gold’s Producer Price Index (PPI).” the Bureau of Labor Statistics noted.

“Gold does well in times of risk. If you look at market declines or systemic events in the market, that’s when gold really shines,” Cavatoni said.

How do you actually go about buying gold?

For a new gold buyer, Cavatoni says the first step is to consider your goal in holding gold, whether to diversify your portfolio or as a safe haven asset.

From there, it’s a matter of deciding whether to make the investment using financial instruments such as gold-backed exchange-traded funds or purchasing them physically.

Both come with their own considerations. Delivery, storage and custody, for example, are factors in keeping gold in physical form.

Another consideration when purchasing gold on the retail market is how the sticker price of the bullion compares to the spot price of gold.

“You want to make sure you’re comfortable with that price level, that you’re buying the investment you want and that you’re not being offered something that might be a little more collectible,” Cavatoni said.

From banks to reputable physical and online retailers, gold buyers have options on where to invest. But Cavatoni advises having a “back and forth mentality” when purchasing physical gold, emphasizing the importance of the sales stage as much as the purchasing process.

“When it comes time to hold it for as long as you want and sell it, make sure you have a trusted partner that you can go back to and make the sale,” he said.

Other things to keep in mind are the purity of the gold and the way it is presented. Products such as gold jewelry can command higher premiums depending on design and artistic value, introducing further complexities.

On the other hand, gold-backed ETFs free consumers from the considerations that must be made when purchasing physical gold.

“It’s like buying stocks,” Cavatoni said. “Nowadays you can do it commission-free on many platforms, so it’s very cheap to get in and out.”

But as with any investment, Cavatoni says exercising caution and doing your homework when purchasing gold in any form takes priority over speed.

“If something sounds too good to be true, it probably isn’t. Make sure you exercise caution before making the investment,” he said. “There is no need to rush to own gold.”

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