Is It Too Late to Buy Gold?

On April 1, 2024, I wrote a newsletter on the topic of buying gold. At that time, it was trading for $2,249 in US dollars. Today, as I write this, it is at $2,658 per ounce, an increase of 18% since I started discussing it. That current price is an all-time high for the precious metal. Silver is also rising with gold. Is it too late to buy it now?

In that first newsletter, I discussed how I bought it in Canada and why I think having it as 5% of the portfolio is a good idea. Scroll back to that April 1st newsletter and re-read it. You can also listen to the January 29, 2024, podcast, “Gold or Crypto,” where I discuss buying gold. Then the price was $2,031 per ounce, reflecting an increase of 30% by today if you had bought it then.

Honestly, what has happened to the price of gold reflects inflation and world uncertainty. Up or down, it doesn’t matter as it is more of an insurance policy should inflation continue to rise and issues begin to appear in America.

Gold is currently priced in American dollars, and the chances of conflict after the presidential election are becoming very real. The two recent attempts on the Republican Nominee’s life highlight the fragile nature of America. Gold could help to provide some stability to the portfolio.

While experts and government officials tout the drop in inflation compared to recent times, they fail to understand the compounding nature of the past inflationary bump. The 50% price increase during the first two most difficult years of inflation remains. Now, increases of 2.5% per year are actually 50% plus the 2.5% 12-month increase. Something that cost $10 before inflation now costs $15.38. Does that seem like there is no inflation today?

It will take years of work to help consumers experience real gains in buying power. Governments' increased printing of money and the current trend to reduce interest rates could spur more buying. Just-announced port strikes could again lead to supply chain shortages.

There is a psychology to what we are currently seeing in consumer behaviour. Trust is becoming an issue with food, staples and financial services. This is occurring in both Canada and the United States.

I continue to buy gold because it helps me sleep at night. Storing it in a bank safety deposit box continues to make the most sense to me. As mentioned in previous podcasts and newsletters, TD Precious Metals is a Canadian source I trust. I see gold acting as if it is mini-real estate that is liquid and can be sold quickly at any time. So, I don’t believe it is too late to purchase gold. It should be part of a regular investment strategy regardless of the price.