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Gold prices are high: Should you buy 1-ounce gold bars now?

By Angelica Leicht, CBS News


Gold prices have been climbing over the last few weeks, and on Monday, the price of gold hit a new record high of over $2,400 per ounce. The price of gold was just above $2,100 per ounce in late March, meaning that gold's price has increased by about 14% in a relatively short period. This price surge is due, in large part, to today's unique economic climate, which is plagued by persistent inflation, geopolitical strife, high interest rates and other unusual factors. That has led to increased demand by investors who are seeking a safe-haven asset to preserve their wealth and diversify away from more volatile assets. 


But those aren't the only factors that have been driving gold's price ascent. The upward price trend itself has also been essential in attracting a new wave of investors who want to capitalize on the potential for quick returns on their gold investments. 


And, considering the current market conditions, it could make sense to follow suit and add gold to your portfolio now. There are numerous options for investing in gold, including gold mining stocks and gold individual retirement accounts (IRAs) and physical gold. 1-ounce gold bars in particular, are one of the most popular and accessible choices. But does it make sense to invest in these smaller gold bars as gold prices hover near record highs?


Does it make sense to buy 1-ounce gold bars now?


Every investor should take into account their unique goals and circumstances when deciding what assets make sense to add to their portfolios. That said, with gold prices at lofty levels, it could make prudent financial sense to allocate a portion of your portfolio to 1-ounce gold bars.


For starters, there's a good chance that gold prices will continue to increase over time, even if prices dip along the way, as gold has historically steadily increased in value over the long term. But if the uptick in gold prices continues, you may be able to purchase 1-ounce gold bars now and earn a quick return on your investment. After all, gold prices are up significantly compared to this time last year, and the significant price increase that occurred over the last three months could be a good indicator of future movement.


And gold, especially gold bars and coins, has long been viewed as a safe-haven asset that can help preserve wealth during turbulent economic periods. When markets are volatile and economies are struggling, investors often flock to gold as a reliable store of value and hedge against other riskier assets.


Gold is also an excellent hedge against inflation. That's because, historically, gold prices have climbed alongside inflation. As the cost of living rises, physical gold tends to appreciate and maintain its purchasing power. This allows investors to protect the real value of their wealth from being eroded by rising prices. 


And, unlike fiat currencies, the supply of physical gold is essentially fixed and cannot be inflated away by central banks or governments. This scarcity helps underpin gold's value over the long run, especially during inflationary periods when paper money loses purchasing power. The low correlation between gold's price movements and other assets like stocks and bonds also makes it an excellent portfolio diversifier, helping to reduce overall portfolio risk and volatility in uncertain times.


Benefits of investing in 1-ounce gold bars

There are a few other unique benefits to investing in 1-ounce gold bars in particular, including:


Affordability

While gold remains a significant investment regardless of what form you purchase, 1-ounce bars are generally more affordable than larger-sized bars or premium numismatic coins. This relative affordability helps to democratize gold ownership, making it accessible to a wider range of investors.


Liquidity

One of the primary benefits of 1-ounce gold bars is the exceptional liquidity they offer compared to larger gold products. These smaller bars can be bought and sold relatively easily through a wide network of precious metals dealers and exchanges. And, that high liquidity allows investors to readily access their invested capital if circumstances require it.


Portability

At just 1 troy ounce in weight, these compact bars are extremely portable and can be discreetly stored or transported with relative ease. This portability can be advantageous for investors who are looking to avoid the high costs associated with using gold custodians and third-party storage options.


Divisibility

Because they conform to a standard weight, 1-ounce gold bars can be divided into smaller fractional portions without having to liquidate the entire holding at once. This divisibility provides convenience and flexibility that larger bars often lack.


Tangible asset

Some investors derive satisfaction from owning a tangible hard asset like gold that cannot be debased and has maintained value across millennia, rather than just holding paper assets or digital wealth. And, that's what 1-ounce gold bars offer you coupled with an affordable price point compared to many other physical gold assets.


The bottom line

Investing in 1-ounce gold bars can make sense right now between the potential for quick returns and the many other benefits this type of gold investment offers. And, while investing in any form of gold carries inherent risks, like short-term price volatility that can impact the value of your investment temporarily, the current economic issues we're facing could mean that adding gold to your portfolio is a wise decision right now, too. But before you buy in, make sure to consider all potential benefits and risks to ensure that it makes the most sense for your unique circumstances.



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