Up until the Fed decreased its federal funds rate in October, rates of interest were high. Now with reduced rates of interest and expectations that the Federal Reserve may cut rates further this month, investors are advised to examine which gold investment best suits them.
This is because many investors often turn to the precious metal during economic uncertainty as it can protect their wealth while also providing stable value as well as steady returns despite fluctuations in the market.
Below, we look at different investment options that may be favorable in the current environment.
- Physical gold
With a possible recession on the horizon, a presidential election in its final stages and the recent rate changes, the precious metal is a safe investment. Buying physical gold like gold coins and bars will ensure that your money retains its value while also diversifying your portfolio.
Mediate Financial president, Christopher Mediate, states that investing in physical gold also affords investors some confidence in uncertain times. Mediate adds that purchasing physical gold gives an investor a tangible asset as well as a store of value that can be used to barter if necessary.
- Yield-earning investments
Monetary Metals’ Head of content, Ben Nadelstein, explains that yield-earning investments are an attractive way to invest in gold. He adds that products which pay a yield on precious metals like silver and gold become even more attractive when rates of interest drop.
This, he notes, includes gold and silver bonds which provide higher yields and precious metals leases which pay between 2-5% on the precious metals.
- Gold exchange-traded funds
Exchange-traded funds (ETFs), particularly those that invest in and hold physical gold, are another avenue to diversify one’s portfolio in periods of lower rates of interest. During these periods, risk may increase for other asset classes, which makes holding them risky for investors.
Mediate explains that investors buying gold as diversifiers during times of economic uncertainty often use gold or even silver ETFs to support their portfolios and offer access to the asset class. The firm adds that gold ETFs provide liquidity to investors as they are easy to purchase as well as sell.
Overall, it is important to keep in mind that there is no one strategy for investing in gold. Investors are advised to consult a professional before deciding on their investment vehicles. Professionals can offer personalized guidance on one’s budget, objectives and investment portfolio. If such a consultation makes one realize that gold stocks would be a better option, then conducting detailed due diligence on companies like Emperor Metals Inc. (CSE: AUOZ) (OTCQB: EMAUF) (FRA: 9NH) could point you to the best gold mining stocks to acquire.
NOTE TO INVESTORS: The latest news and updates relating to Emperor Metals Inc. (CSE: AUOZ) (OTCQB: EMAUF) (FRA: 9NH) are available in the company’s newsroom at https://ibn.fm/EMAUF
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