The price of gold rose sharply in 2024. Here's how to get started on the gold rush

CNN
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Not everything that glitters is gold, but the value of the precious metal has risen rapidly this year.

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

The Federal Reserve's recent dramatic interest rate cut of half a percentage point, geopolitical tensions and economic uncertainty related to the US presidential election campaign Elections have created the conditions for prices to rise. The rally was boosted by the central banks of China, India and Turkey easing their reliance on the U.S. dollar and retail giant Costco stocking up on 1-ounce bars.

“Costco's offering of gold makes it as easy for retail investors to buy gold as it is to buy staples,” said Joseph Cavatoni, senior market strategist at the World Gold Council. “Buying gold has never been easier or more accessible.”

While gold is usually invested in B. As a hedge against inflation, has shined this year, there are a lot of things to know before investors join the gold rush.

Traders tend to turn to gold during times of uncertainty, betting that its value will hold up better than other assets such as stocks, bonds and currencies when this occurs The economy is facing a downturn.

“Between 2008 and 2012, the value of gold increased dramatically, as evidenced by the 101.1 percent increase in the producer price index (PPI) for gold,” the Bureau of Labor Statistics noted.

“Gold performs well in moments of risk. When you look at market downturns or systemic events in the market, that’s when gold really shines,” Cavatoni said.

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

From there, it is a matter of deciding whether to make the investment using financial instruments such as gold-backed exchange-traded funds or by purchasing in physical form.

Both have their own considerations. For example, delivery, storage and safekeeping are factors in owning gold in physical form.

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

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

From banks to reputable brick-and-mortar and online retailers, gold buyers have a choice of where to invest. However, Cavatoni advises a “round trip mentality” when buying physical gold and emphasizes the importance of the selling phase as well as the buying process.

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

Other things to keep in mind are the purity of the gold and the form in which it comes. Products such as gold jewelry can fetch higher premiums based on design and artistic value, leading to more complexity.

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

“It’s like buying a stock,” Cavatoni said. “Nowadays, this is possible on many platforms without commission, so entry and exit is very cheap.”

But as with any investment, Cavatoni says that when buying gold in any form, acting prudently and doing your homework takes priority over speed.

“If something sounds too good to be true, it might not be true. Make sure you are careful before making the investment,” he said. “There is no need to rush to own gold.”