Even with new measures taken by the Federal Reserve, investing in gold can still be beneficial for many people at this time. Getty Images
Inflation slowed again in September, the Bureau of Labor Statistics said Thursday. Currently, the interest rate is just 2.4%, close to the Federal Reserve’s 2% target. As a result, two 25 basis rate cuts are expected ahead of the Fed’s next meetings in November and December. Combined with the 0.5 percentage point cut the Fed decided in September, the federal funds rate could be cut by almost 1 percentage point by the end of the year.
Understanding this possibility, savers, borrowers, and investors may all want to readjust their strategies. Investors in particular may want to review their current assets and look at alternative assets such as precious metals. For example, investment in gold hit an 11-year high last year, even as inflation remained high and interest rate cuts seemed a long way off. But is it still worth investing now, ahead of the possibility of further rate cuts at the November Fed meeting? Below, we detail three reasons why gold is still worth pursuing.
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Should you invest in gold before the November Fed meeting?
Not sure if now is the right time to invest in gold? Here are three smart reasons to consider doing so before the November Fed meeting.
prices are rising
Gold prices have been on an explosive rise since the start of 2024, starting the year at $2,063.73 per ounce and soaring above $2,600 in September. Currently at $2,672.22 an ounce, gold is up nearly 30% this year, with many experts predicting it could soon reach the $3,000 level.
Therefore, it makes sense to invest before that happens, while prices are still manageable. And the Fed is planning to take action that could affect the entire economy, and now might be a good time to do so.
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Diversification still makes sense
It will take time for the September rate cut and the presumed November rate cut to take effect. When such effects are felt, you’ll be glad you had a diversified portfolio to offset any unexpected negative effects. Gold can help with diversification, as it often maintains or appreciates value during times of economic instability. Most experts recommend limiting gold to no more than 10% of your overall portfolio, so be sure to invest in a prudent manner.
inflation is cyclical
Indeed, the current inflation cycle appears to be nearing an end. But inflation is cyclical, and at some point, perhaps sooner than expected, inflation will pick up. As the Fed works to establish new norms, it makes sense to buy gold now and preemptively build that protection. Gold is considered a traditional hedge against inflation, regardless of when it occurs.
Add it now in case that happens. Waiting for additional inflation news or further Fed activity could put subsequent prices out of reach.
conclusion
For those looking to time their gold investments, it’s important to remember that gold is a long-term investment with long-term implications. Therefore, it could be beneficial for many investors to invest now before the next Federal Reserve meeting that could cause a realignment of the economy. This allows you to take advantage of rising prices while diversifying your portfolio and adding a hedge against future inflation. And if the investor changes his mind quickly, he could sell his gold investment and make a quick profit.
Have more questions? Learn more about investing in gold online today.
matt richardson
