Experts Explain How Investors Can Leverage Current Gold Prices

A confluence of geopolitical factors has caused gold prices to surge in recent months and made the precious metal an attractive prospect for many investors. With many countries experiencing rising living costs and high interest rates amid an increase in armed conflicts, investors are looking at gold as a means of diversifying their portfolios and protecting them from volatility.

Many experts are advising investors to buy now before gold prices get out of control. The precious metal has already experienced a major surge in price that has left original holders with significant gains and will likely see continued upward pressure if current geopolitical factors remain as they are.

As such, investing in gold now or in the near term would allow investors to benefit from rising gold prices before the precious metal is out of their price range. Experts predict gold prices will continue to rise in the near term if high inflation rates coupled with the global political landscape don’t undergo any major changes.

Allegiance Gold cofounder Alex Ebkarian says that it is likely gold prices will remain elevated for an “extended period of time.” He noted that it is possible for the precious metal to trade at even higher prices depending on how global “geopolitical tensions and economic issues” play out this year and into next year.

These geopolitical factors include the ongoing Russia-Ukraine war, which has had a major effect on global energy prices, as well as the Gaza conflict, which could potentially spill over into the rest of the Middle East and cause oil prices to surge. In addition, shipping attacks in the Red Sea have threatened to cripple critical international shipping lanes.

Gold prices have jumped significantly in 2024 alone, increasing from around $2,000 an ounce at the start of the year to almost $2,400 per ounce as of April 22.

Investing in gold exchange-traded funds (ETFs) and stocks could also allow investors to profit from increasing gold prices, experts say. According to Ebkarian, gold stocks and ETFs are a smart investment option for investors interested in day trading or short- to medium-term, gold-related investments. Still, he urges investors to do their research before investing in precious metal ETFs as these investment options can expose them to counterparty risk, primarily because custodians manage ETFs and are responsible for each fund’s management and operations.

Investors can also add gold to their portfolios by purchasing physical gold, Global Wealth Advisors’ Kevin Curley says. Curley says that physical gold usually has a “small markup to the spot rate” and can be easily stored in a safety deposit box at the bank or a safe at home. Government data also shows that investing in physical gold can provide investors with a hedge against rising inflation.

AMPEX director of marketing Brett Elliott explains that physical gold functions better as an inflation hedge; it typically has lower costs compared to other types of gold investments.

As gold continues its current upward price movement, investors keen on adding gold stocks to their portfolios are likely to keep an eye on established miners such as Newmont Corporation (NYSE: NEM) (TSX: NGT) to see whether they could be good additions to their holdings.

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