In 2024, the price of gold soared, breaking through the $2,700 mark. As we step into 2025, the upward trend shows no signs of slowing down, with the current price of gold per ounce surpassing $2,800.
Several factors have contributed to the increase in the price of gold. Firstly, inflation rates have been rising steadily over the past three months, interest rate cuts seem to be on hold, and geopolitical tensions are high. For investors with significant holdings in stocks and bonds, gold serves as an asset to diversify investment risks.
Furthermore, as time progresses, investors stand to gain continued capital gains as the price of gold rises.
With the current record-breaking price of gold, many investors may wonder if it is still a good time to buy gold. Investment analysts suggest asking oneself the following three questions.
Analysis indicates that the international political and economic situation is volatile, a trade war could erupt, inflation rates continue to rise, and the price of gold still has strong support.
Goldman Sachs estimates that the Federal Reserve (Fed) will reduce interest rate cuts this year, thus revising down the target price for gold. The target price by the end of 2025 is projected to be $2,910 per ounce, with a possible push to the $3,000 mark by mid-2026. However, JPMorgan Chase and others believe that the price of gold could reach $3,000 as early as 2025.
Investing in precious metals has its advantages but also some drawbacks. The biggest downside to investing in gold is that it does not yield interest. To generate returns from gold, one usually has to rely on buying low and selling high. As opposed to this, stocks can provide income through dividends.
Before investing in gold, it is crucial to understand the nature of this investment and your investment objectives, whether it is to hedge against inflation effects or to hedge against stock market volatility. Understanding the reasons for your investment can help you remain unaffected by short-term price fluctuations, avoid chasing highs and selling lows, and stick to your investment plan consistently.
The long-term outlook for the price of gold is positive. A report by CBS NEWS points out that waiting for a drop in gold prices before investing is not rational, as one could miss out on potential investment returns during the waiting period, and gold prices might not even decline. If you are certain about investing in gold, it is advisable to start sooner rather than later.
However, the price of gold will continue to fluctuate in the short term, and it is recommended not to chase highs. Instead, it is advisable to observe consistently and consider making a move when prices are relatively low.
(This article is for general informational purposes only and does not constitute any recommendation. Epoch Times does not offer investment, tax, legal, financial planning, real estate planning, or other personal financial advice. For specific investment matters, please consult your financial advisor. Epoch Times does not assume any investment responsibility.)