When in latest inflation report was released this week, offering good news for many Americans. After an unexpected retreat in early 2024, inflation eased again in June, falling to 3.0%, a decrease of about 0.1% from the previous month. This is the third consecutive monthly decline and the fastest inflation has fallen since June 2023. And, with each drop in inflation, the rate inches closer to the Federal Reserve’s 2% target, meaning the possibility of Fed interest rate cuts in the future. also increases.
But even if the Fed keeps rates steady at its next meeting, the drop in inflation may have a positive impact on some areas of the economy, including the cost of essential items like groceries and housing. This is also a positive development for borrowers, because The Fed for the past year kept interest rates locked in two decades high in an effort to prevent inflation. With reduced inflation, there may be decrease in interest rateswhich will provide much needed relief to those who need to borrow money.
While the reduction in inflation may be a bright spot in many ways, it may also affect certain types of investment, including gold. Investing in gold has attracted investors over the past year, largely due to inflation concerns and economic uncertainty. Now that inflation is on the decline, though, gold investment – and 1-ounce gold bar especially – is it still a good choice?
Learn more about how real gold investments can pay off here.
Are 1 ounce gold bars still a good investment with inflation?
The short answer is yes, 1 ounce of gold bullion can still be a good investment for the right investor, even if inflation is down. This is because when gold tends to shine during periods of high inflationits appeal as an investment vehicle goes beyond its role in that capacity.
For starters, it’s gold excellent tool for portfolio diversification – and a diversified portfolio is important despite inflation. A well-diversified portfolio is built to deal with financial problems and the value of gold tends to move independently of stocks and bonds, so by adding gold to your portfolio, you gain protection against losses from traditional investments due to market volatility.
And, while short-term price fluctuations can occur, gold has historically maintained its value over long periods of time, so reliability store of wealth. So, by investing in gold now, you will see the price of your gold stay stable and increase in the long term. Gold can also act as a hedge against currency devaluations, which can remain a concern even if inflation falls.
In addition, the global economic challenge is still a real problem in the current economic environment, although inflation figures are improving now – making gold, and, 1-ounce gold bar, smart bet. After all, geopolitical tensions and economic challenges occurring in other parts of the world can help drive demand for gold as a safe-haven asset, so putting money into this type of gold bar can pay off, even if inflation continues to improve. .
And, there are other reasons to consider investing in this type of gold bar, including:
- Continuous inflation protection: As inflation eases, it’s important to remember that economic conditions can change – and you need access to assets that can protect your wealth when they do. And, since gold is an inflation hedge, it can serve as long-term protection against emerging future inflationary pressures.
- Liquidity: Another great benefit of investing in this type of gold is the 1 ounce gold bar very liquid and easy to trade.
- Reduce counterparty risk: Unlike many financial assets, physical gold not relying on the promise or performance of the counterparty, reducing certain types of risk.
Compare the gold investment options available to you online today.
Potential investment loss in 1 ounce gold bars
But while 1 ounce gold bars can still be a good investment for the right person, it’s important to consider potential downsides, including:
- Storage and insurance costs: Physical gold requires safe storage and insurancewhich can increase the overall cost of investment.
- Disadvantages of passive income: Unlike stocks that pay dividends or bonds that pay interest, gold does not generate passive income.
- price volatility: While gold is often seen as a stable asset, its value is can still be volatile in the short term.
Bottom line
While falling inflation can change the investment landscape, 1 ounce gold bars can still be a good investment. Its role as a diversifier, store of value and hedge for various economic risks remains relevant, even in times of low inflation. However, as with any investment, it is important to do thorough research, weigh your options, consider potential losses and determine which assets best fit your strategy. That way, you can ensure that you are building a balanced portfolio that can withstand various economic conditions.