Inflation has been problematic for most of the past two years, reaching its highest level in more than 40 years in June 2022. This prompted the Federal Reserve to raise its key interest rate to its highest level since 2001 in an effort to keep interest rates in check. However, inflation has been steadily declining since 2022, with the latest report released on Wednesday showing that inflation fell to 3.4% in April from 3.5% in March. Although this is a small decrease, it is a step in the right direction for borrowers and investors looking to improve their portfolio performance.
With this in mind, you may be wondering what are the benefits of investing in gold. In recent years, gold has become a valuable hedge against inflation, and the price of the precious metal has already broken numerous records in 2024. But is it worth investing in gold when inflation is falling, or should investors look for alternative assets?Even though inflation has slowed over the past month Below we explain why investing in gold still makes sense.
3 Reasons to Invest in Gold as Inflation Slows
Here are 3 Reasons to Consider Investing in Gold Now Even After New Inflation Statistics Are Released:
Inflation Declines is minimal
Indeed, inflation fell in April. However, the decline was minimal and came after interest rates rose in February and March, respectively. Therefore, it is still worth adding gold to your portfolio. Thanks to its historic ability to maintain and even increase its value during periods of inflation, your portfolio will continue to benefit from the protection that gold investments can provide. And considering that inflation is still 1.4% above the Federal Reserve’s 2% target, it makes sense to invest in gold until this inflation cycle is truly complete.
Gold has other benefits
Gold is popular for its ability to hedge against inflation, but there are also other benefits available to investors. For example, they perform differently than regular stocks and bonds, making them great for diversifying your portfolio. And unlike these assets, they are tangible and can be easily bought, sold, and repurchased in a variety of physical forms. After all, gold is now everywhere, easy to invest in online and in person, and requires less investment and knowledge than other assets.
Prices can be prohibitive
Gold has broken numerous price records so far in 2024 and is likely to continue to do so as long as inflation remains a key concern. There is a possibility that The current price of gold is $2,365.07 per ounce, so it makes sense to buy now before the price gets out of reach. And given that a slight increase in inflation in May and several other factors could lead to this increase, it’s hard to act aggressively today despite the cooling inflation reports. makes sense.
Conclusion
Inflation fell last month, but there`s no telling if that was an anomaly or a sign of further economic weakness. In these circumstances, most investors would still be wise to pursue gold. After all, the drop in inflation in April was minimal, and gold has benefits beyond hedging against inflation. Also, with prices currently rising and volatile, investors may want to add gold to their portfolio now before the price makes them unable to trade.
