It is no secret that a recession is looming in the USA and that inflation remains at a concerning high. Due to this uncertainty, many Americans are reconsidering their investments. Even individuals with a Roth IRA, 401(k) or other types of savings have been affected by die volatile situation within the stock market. If you have not enjoyed much luck with your other investments, it might be time to diversify your investment portfolio and add gold to the equation.
2022 Had Its Ups and Downs
As with most other precious metals, 2022 has been a year of ups and downs as far as gold is concerned. During the first week of March, the war in the Ukraine pushed the gold price to its highest price since 2020 as investors looked for protection increased inflation and escalating geopolitical concerns. For the remainder of the year, however, other factors resulted in gold losing some ground. For starters, in an attempt to curb inflation, the U.S. central bank started inflating interest rates. This pushed the dollar to the highest it has been in twenty years. By mid-May, the gold price stabilized somewhat and in September the price decreased by 2.6% thanks to the dollar that continued to surge together with the very belligerent rate-hikes.
Next Year is Showing Promise
Although it is impossible to predict exactly how gold will perform during the course of 2023, early indications point to it being a promising year for investors. According to Goldman Sachs, the gold price may rise if the Fed reduces rates and the USA economy slide further into a recession. Despite the Russian invasion of the Ukraine no longer making daily headlines, geopolitical concerns between China and Taiwan can impact the gold price further. Gold coins and gold bars, in particular, are already being touted as solid investments for the new year. Before adding them to your portfolio, however, it is essential to familiarise yourself with some relevant terms to help you make sound investments.
Buy Sooner Rather than Later
Buying gold at the start of 2023 can provide you with many benefits in addition to a diversified investment portfolio. It is important to note that a gold investment may not be the best option if you are older investor looking for a reliable, steady income from your investments. Younger investors, however, will definitely benefit from dividing their money between different types of investments. Gold will not only continue to serve as a hedge against inflation next year, but will also be one of the easiest assets to liquidate. Because of this, the interest in gold and the buying power associated with it will remain consistent.
The economic uncertainty in the USA is forcing investors to take a very close look at their existing investment portfolios as well as the available investment opportunities for the new year. Although there are many stocks and bonds that will make for worthwhile investments, gold is once again promising to be a solid choice for first-time and experienced investors alike.