Get In On The Gold Rally?
Kiplinger's Personal Finance|October 2019

Stock market volatility has given investors gold fever. If you chase the rally, don’t overdo it.

John Waggoner
Get In On The Gold Rally?

Gold, which did little except glitter for most of the past five years, has seen price gains this year that rival Standard & Poor’s 500stock index. Gold began the year at $ 1,279 an ounce, and it is currently trading at $1,498, a 17.1% gain. The S&P 500 is up just a shade more. (Returns and other data are through August 9.)

Gold is trading at its highest price since April 2013. The price could continue to rise if stock market volatility and global growth concerns persist, says Wells Fargo strategist John LaForge. Or it might need to rest before rising again. Nonetheless, says Joe Foster, portfolio manager at the VanEck funds, “If a recession is on the horizon, then gold could hit new highs.”

If you’re thinking of chasing the rally in gold, be sure you’re buying for the right reasons. Speculators in gold are often disappointed, but the metal does have some uses, in small amounts, as a portfolio diversifier, an inflation hedge and insurance against financial catastrophe.

Gold has been used as money since King Croesus of Lydia minted the first gold coins in the sixth century B.C. But no country makes gold coins for circulation anymore. Although jewelry is now the primary use for the metal, investor demand is what drives the price of gold, and fear is what drives investor demand—fear of inflation, war, a government coup or some apocalyptic event.

You don’t need a catastrophe for gold to rise in price. Gold rose from $712 per ounce in October 2008 to more than $1,800 an ounce in August 2011 as the U.S. reeled and recovered from the largest recession—and bear market in stocks— since the Great Depression.

هذه القصة مأخوذة من طبعة October 2019 من Kiplinger's Personal Finance.

ابدأ النسخة التجريبية المجانية من Magzter GOLD لمدة 7 أيام للوصول إلى آلاف القصص المتميزة المنسقة وأكثر من 9,000 مجلة وصحيفة.

هذه القصة مأخوذة من طبعة October 2019 من Kiplinger's Personal Finance.

ابدأ النسخة التجريبية المجانية من Magzter GOLD لمدة 7 أيام للوصول إلى آلاف القصص المتميزة المنسقة وأكثر من 9,000 مجلة وصحيفة.

المزيد من القصص من KIPLINGER'S PERSONAL FINANCE مشاهدة الكل
FREE HELP FOR COLLEGEBOUND STUDENTS
Kiplinger's Personal Finance

FREE HELP FOR COLLEGEBOUND STUDENTS

This program’s mentors assist applicants as they fill out the FAFSA, write essays and more.

time-read
2 mins  |
December 2024
WHAT YOU SHOULD KNOW ABOUT SPOUSAL IRAS
Kiplinger's Personal Finance

WHAT YOU SHOULD KNOW ABOUT SPOUSAL IRAS

You typically need earned income to contribute to an individual retirement account, but a spousal IRA provides an important exception to this rule.

time-read
2 mins  |
December 2024
SELLING SHARES? HERE'S HOW TO MINIMIZE TAXES ON YOUR GAINS
Kiplinger's Personal Finance

SELLING SHARES? HERE'S HOW TO MINIMIZE TAXES ON YOUR GAINS

ET'S say you've been regularly buying shares in a booming tech company over the past few years, but now you want to start taking some of those profits, perhaps to rebalance your portfolio.

time-read
5 mins  |
December 2024
Strategies for Novice Investors
Kiplinger's Personal Finance

Strategies for Novice Investors

AS part of a lifes kills program for young, single mothers, I was asked to teach a class on how to get on top of your finances.

time-read
3 mins  |
December 2024
ANSWERS TO YOUR 529 PLAN QUESTIONS
Kiplinger's Personal Finance

ANSWERS TO YOUR 529 PLAN QUESTIONS

Thanks to recent policy changes, families have more options for what to do with money sitting in these tax-advantaged accounts.

time-read
6 mins  |
December 2024
Rate-Cut Winners and Losers
Kiplinger's Personal Finance

Rate-Cut Winners and Losers

NOW that the Federal Reserve has cracked the interest rate ice, the next development will be to separate winners from losers.

time-read
2 mins  |
December 2024
SHOULD YOU BUY THESE RED-HOT FUNDS?
Kiplinger's Personal Finance

SHOULD YOU BUY THESE RED-HOT FUNDS?

Covered-call ETFs are popular but come with plenty of caveats.

time-read
6 mins  |
December 2024
DIVIDEND STOCKS ARE READY TO REBOUND
Kiplinger's Personal Finance

DIVIDEND STOCKS ARE READY TO REBOUND

Our favorite dividend payers are poised to benefit as falling interest rates lure investors back.

time-read
10+ mins  |
December 2024
IS A 55+ COMMUNITY RIGHT FOR YOU?
Kiplinger's Personal Finance

IS A 55+ COMMUNITY RIGHT FOR YOU?

These age-restricted developments appeal to older adults seeking abundant amenities and an active lifestyle.

time-read
8 mins  |
December 2024
AT LONG LAST, RATES ARE DROPPING
Kiplinger's Personal Finance

AT LONG LAST, RATES ARE DROPPING

Consider these portfolio moves now that the Federal Reserve has cut its benchmark interest rate.

time-read
4 mins  |
December 2024