Current price of gold: Oct. 10, 2024

Gold is an asset that many people like to own for inflation protection. Rising prices tend to erode the purchasing power of a currency like the United States dollar while gold generally increases in value over the long term. Owning gold—like in a gold IRA—can help investors maintain the value of their portfolios and build their assets as well as hedge against volatile markets. 

“Gold has intrinsic value and tends to retain its worth over time, making it a stable store of value during economic uncertainties,” says Dennis Shirshikov, a finance professor at City University of New York. Gold can also be a good investment because of its liquidity, according to Shirshikov, since the asset “can be easily bought and sold in the market.” 

Historical gold price 

Gold can be a great investment in certain periods, such as when inflation is high or the market is slumping. But it’s not always the best option when the economy is strong, and gold can lose value when investors put their money to work in growth assets like stocks.

Over the very long term, gold has a significantly lower average annual return than stocks. From 1971 to 2024, the stock market delivered average annual returns of 10.7%. Gold delivered an average annual return of 7.9% over the same period.

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What does “spot gold” mean? 

The spot gold price is the price to buy or sell gold immediately in an over-the-counter trade. Investors can track the spot price of gold to better understand the investment trends and demands for gold investments. The higher the gold spot price, the higher the demand for gold. Unlike futures contracts, the spot price is for an immediate sale.  

The spot price may exceed the futures price, or it may be lower than it. When it is lower than the futures price, it is called contango. This is common when investing in commodities that have a high storage cost. When the spot price exceeds the futures price, this is called backwardation. Experts believe that current market prices will converge with futures prices eventually.

The spot price is affected by many factors, including the supply and demand of the commodity. Because of this, the spot price is constantly changing. Investors should be prepared to deal with constant price fluctuations when investing in gold. 

What is price spread in gold trading?

A price spread is the difference between the price offered to purchase an asset vs. the price offered to sell it. 

Gold works the same way: The offer price, or ask price, is the amount the gold is to buy. This is what you’ll spend when making your investment. The bid price is what you can sell the asset for. Bid prices are always lower than ask prices.

The lower the spread, the more liquid the market is. Investors should be encouraged by small spreads, knowing that the demand for gold is growing. 

How to invest in a Gold IRA

Having a Gold IRA account is one way to invest in the precious metal for retirement. You’ll have to open a self-directed IRA, a special kind of IRA that is held by a custodian that allows you to invest in a broader range of assets, such as cryptocurrency, precious metals, and artwork. Gold IRAs are a specific form of self-directed IRA for gold investors.  

Gold IRAs follow the same basic rules for contribution limits, required minimum distribution, and tax advantages as traditional IRAs. However, there are strict rules concerning what types of gold you can invest in with a gold IRA. Only coins and gold bars that contain a purity grade of 99.5% or better are eligible.

Other ways to invest in gold 

According to fee-based financial advisor James Taska, gold can be purchased as a physical asset or as a securitized product. “There is a great debate as to whether paper gold is as useful as the physical,” he says. “From a financial advisor’s viewpoint, it is much easier to rebalance a client’s allocation of gold if it is owned as an exchange-traded fund (ETF), and the spread when attempting to buy/sell gold can be quite variable and wide.” 

There are many ways to buy gold. Here’s how you can invest in it:

• Gold bars: Known as bullion, many investors choose this option when investing in gold. You can buy it per gram or ounce, and the purity, weight, and manufacturer should be stamped on the face of the bar. 
• Gold coins: These are collectible coins, such as the American Gold Eagle coin. Because they are collectibles, they may be bought for a premium over the weight amount of the gold. 
• Gold jewelry: Because people buy jewelry for its aesthetic value as well, the price may be significantly more than the value of the gold’s weight. 
• Gold futures contracts: A futures contract states that the investor will buy a specified amount of gold for a defined price at a future date. Futures allow investors to speculate on the price of gold in the future without handling the actual physical product. 
• Gold funds: These are mutual funds or ETFs that own gold assets. You can purchase shares in gold funds or any other mutual fund investment, and their value fluctuates based on the changes in the underlying portfolio of assets. 

Is it a good time to invest in gold?

According to Taska, an “allocation to gold should really be considered on a case-by-case basis.”  However, Shirshikov notes that “diversifying a portfolio with gold can reduce overall risk and volatility.” 

Because we are living in inflationary times, many investors are looking to diversify their portfolios with gold. Many find that gold offers stability in a highly volatile period for the stock market. Prices have risen to an all-time high since inflation took off over recent years, and J.P. Morgan expects prices to continue to rise to an average of $2,500 per ounce by the end of 2024. Many experts agree this is a good time to diversify your portfolio with gold. 

Current precious metals prices as of 9 a.m. ET today

Along with gold, silver, platinum, and palladium are popular precious metals that investors hold in portfolios. When it comes to volatility, gold is less volatile than silver. Silver can have major price swings on any given day. However, silver is more sensitive to economic changes because of its vast use in many industries. 

Platinum and palladium also have high industrial uses. Investing in these rare metals is another way to diversify a portfolio, although these metals do fluctuate widely. This can give investors an opportunity to capitalize on speculative profits. 

The takeaway 

The U.S. economy has been in flux for several years now, and inflation has affected all households. Investors can use gold as an inflationary hedge in their portfolios. There are many ways to purchase gold, making it an easy asset to accumulate based on an investor’s comfort level and interest. You can buy gold in an IRA or a nonretirement account, fitting into both short—and long-term investment objectives. 

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