Earlier this week, gold saw its price surpass the $2,600 mark, a new high for the precious metal. Since the start of the year, gold has performed better than the expectations of many, starting in March when its price rose to $2,160 an ounce.
This latest increase in price positions the precious metal as an attractive option for those looking to get fast returns.
Given that the metal’s price is already at a new high, some may wonder if it is it too late to jump on the bandwagon. Many experts believe it isn’t, with some advising that investors add it to their investment portfolios. Below, we look at other reasons why investors may want to consider gold.
Central banks are purchasing more gold
Central banks across the globe have increased their demand for the precious metal in an effort to diversify from traditional currencies. An increase in gold reserves offers a solid foundation for sustained gold prices while also affording investors an opportunity to capitalize on the metal’s future growth in price.
This trend by central banks is expected to continue, which offers support to the precious metal’s price, at least for the short-term.
Gold is finite
Mine output for this precious metal has remained stable the past few years. With existing mines seeing their ore grades decline and new discoveries becoming more infrequent, the supply of gold isn’t likely to increase in the short-term.
As long as the metal’s demand continues exceeding supply, the increase in gold’s price will continue. Individuals that invest in the metal now have the chance to capitalize on this imbalance.
Economic uncertainties
Gold tends to perform well in times of economic uncertainty, with history showing that the metal can maintain its value during tempestuous times. Growing inflationary concerns and geopolitical tensions highlight the need for investors to add this precious metal to their portfolios. This will help diversify portfolios while mitigating overall risk.
In the event that economic conditions become worse or tensions escalate globally, the price of this metal will surge even higher, offering investors hefty returns on their investments.
Increasing technological demand
The use of this precious metal in the electronics industry as well as in emerging technologies in the medical and renewable energy fields is giving rise to new demand for gold. As these applications increase, they could drive prices of gold higher, meaning that investors in the market are well positioned to benefit from this growing market.
It should be noted, however, that while the precious metal’s positive performance is alluring, the market can be unpredictable. Savvy investors may also want to study ways in which gold-explorer stocks, such as those of Emperor Metals Inc. (CSE: AUOZ) (OTCQB: EMAUF) (FRA: 9NH), and gold-extraction companies can help to add exposure to gold in their portfolios.
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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