For the past year, the economy has been a volatile rollercoaster of short-lived and unstable highs with pronounced and costly lows. Investors have been dealt a series of blows from seemingly every angle, including bank collapses, entrenched inflation, reckless federal spending, violent geopolitical crises, and digital dollar developments. Everyone is eagerly waiting to see what economic conditions are on the horizon. Given the ongoing troubles plaguing traditional investors, many wonder: Is gold a good investment in 2024?
While nobody can precisely say where gold prices will head next year, most experts agree that gold prices will look strong in 2024. A dangerous combination of government fecklessness and dwindling US hegemony is running headlong into an unstable, chaotic, and hostile global economic climate. The US isn’t the powerhouse it used to be, and gold is the stable asset central banks worldwide look to cling to when entering this uncharted economic territory.
11 Compelling Reasons Why Gold Should Be a Good Investment in 2024
1. The Threat of a Global Recession
The global economy escaped 2023 without falling into a recession, but the potential hasn’t disappeared. J.P. Morgan puts the likelihood of a worldwide recession at 45% by mid-2024 and up to 60% at the beginning of 2025. Deutsche Bank analysts are striking an equally pessimistic tone, projecting a mild US recession as early as Q1 of 2024.
As the World Gold Council rightfully points out, the possibility of a recession will “encourage many investors to hold effective hedges, such as gold, in their portfolios.” We’re already seeing a massive influx into physical gold assets and outflow from conventional markets in anticipation of a flailing global economy.
“Gold has established [support] over the last couple of years through trials and tribulations of what's happened financially, economically, geopolitically.”
Damian White
Sr. Precious Metals Advisor
2. Another Global Retraction
Even if a recession is avoided, global growth will likely remain alarmingly slow in 2024. The world’s leading economies are expected to reach only modest levels of improvement. US GDP is set to increase by 1.5% in 2024, down nearly an entire percent from 2023’s already abysmal 2.4% climb. Europe’s largest economies are even further behind, with Germany, Italy, and the UK on the path to hitting 0.6%, 0.7%, and 0.7%, respectively. It seems the lion’s share of global growth will be concentrated in Asia, again underscoring the shifting balance of economic power away from the West. Over the past few years, economies have been mired in high inflation and limited growth from ceaseless government spending.
In an increasingly interconnected world, the contraction of global economies is ultimately reflected in investors’ portfolios. Gold has always been a reliable barrier against economic weakness at domestic and worldwide levels, making it a worthwhile investment consideration given 2024’s bleak outlook for international markets.
“The market is moving in a direction that supports owning precious metals. Make sure you're in a position to take advantage of it.”
John Karow
Precious Metals Advisor
3. Stubborn Inflation
The Fed’s frantic patchwork of rate hikes didn’t prevent the economy from busting at the seams with inflation. Officials might tout their last-minute efforts as a success, but the devil is in the details. The most recent data shows that inflation is still growing, albeit slower. Fed Chair Jerome Powell admitted that inflation won’t reach target levels of 2% until 2026. The Federal Open Market Committee (FOMC) is projecting inflation to sit around 3% for much of 2024. It’s crucial to remember that the lingering effects of soaring inflation from previous years haven’t disappeared. Goods cost more, retirement accounts are worth less, and buying power is lower than expected.
Many investors aren’t willing to hand over 2% of their hard-earned money just because of reckless fiscal policies. Physical gold has a proven track record as a reliable hedge against inflation, making it an excellent choice for protection in 2024.
📚 Related Reading: Is Silver a Good Hedge Against Inflation?
“Inflation is very, very good for gold.”
Tim Murphy
Precious Metals Advisor
4. Out-of-Control National Debt
The government’s irresponsible spending addiction is putting the national debt into an irreversible tailspin. The monstrous US debt just topped $34 trillion, representing 123% of gross domestic product (GDP). For perspective, the target debt-to-GDP percentage is 60%. Instead of taking immediate action, President Joe Biden is requesting a $6.9 trillion spending package for 2024, a decent chunk of which would be placed on America’s credit cards.
At this point, investors justifiably wonder what happens if the US defaults on its debt. The fallout would inevitably tank fiat-backed markets, leaving physical assets with inherent value as the only real protection. That’s why so many investors are dumping a portion of their paper investments in favor of physical gold assets, which would only increase in value in the face of a total debt default.
“Gold has always been a reliable store of value...Gold is insurance on your money.”
Eric Sepanek
SBC Founder
5. Multiple Interest Rate Cuts
The Fed plans to lower interest rates several times throughout 2024, with most officials calling for three cuts. This wouldn’t be an unprecedented move as rate hike reversals have a history of lining up with presidential elections. Usually, a drop in interest rates leads to devaluation of the dollar and an increase in gold prices. Throughout the Fed’s rate hike policy, the US dollar was artificially inflated as investors flocked to fiat-backed assets with relatively high returns. Now, the prospect of lower interest rates has investors turning their attention to assets with inherent value, such as gold.
There’s no way of predicting exactly when the policy reversal will come into play, so trying to time the market isn’t advisable. Smart money investors are taking this opportunity to add to their stockpiles before the Fed’s eventual rate cuts send gold prices even higher.
▶️ Related video: Dollar Cost Averaging: What Is It & How It Maximizes Gold Bullion Returns
“When we cut rates...the dollar weakens...and precious metals go up.”
Damian White
Sr. Precious Metals Advisor
6. High Gold Price Predictions
Despite record-setting gold demand, the heavy hand of market manipulation has kept gold prices bogged down for years. Following the high-profile jailing of two J. P. Morgan gold traders, there are signs that gold prices are finally reaching their real value. In late 2023, gold prices established a new floor after bursting through the psychological barrier of $2,100/oz and hitting a new record. The combination of deteriorating economic conditions and healthy price action has many experts calling for even more broken records. The gold price forecasts for 2024 are incredibly healthy, with the average price of gold predicted to be around $2,500 an ounce for the year.
This strong price action and propitious outlook provide investors with an attractive yet limited-time opportunity to safeguard their wealth and enhance their portfolios by catching gold before gold prices go even higher.
“The [buying] opportunities are here…for people to jump on this market and…take advantage of the [gold] prices that haven't gone up through the roof yet.”
Steve Rand
General Manager / Sr. Precious Metals Advisor
7. Soaring Central Bank Gold Demand
Central bank gold demand has been relentless and exponential over the past few years. National banks around the globe are pouring their assets into physical gold, which betrays their lack of confidence in the future of global economics. Within the first nine months of 2023, central banks binged on over 800 tonnes of gold. China has been leading the pack, accounting for 278 tonnes of the worldwide gold demand. The Chinese Central Bank has topped up its reserves for thirteen straight months as the CCP quickly closes the gap between Chinese and American gold reserves.
The weakness of the global economy, the waning influence of the US dollar, and the Fed’s failed fiscal policies paint a bleak economic forecast that will only encourage more central bank gold demand. A tried-and-true investment strategy is to watch what the most well-funded, informed, and influential investors are doing and copy it.
“The bigger central banks...and nations...are buying a ton of gold. Take a page out of their book.”
Eric Sepanek
SBC Founder
8. Growing Geopolitical Tensions
International conflicts inevitably lead to erratic economic conditions with volatile price action, restricted growth, and limited investor confidence. Unfortunately, 2024 could see several ongoing wars and even new struggles. The Russian-Ukraine War has been at a deadly standstill for over two years, with no peace talks on the horizon. The more recent Israel-Hamas War is threatening to spread into a regional conflict. At the same time, China is ramping up its provocations in the Pacific against US allies such as Taiwan and the Philippines. If that wasn’t enough, a decades-long land dispute between Venezuela and Guyana is resurfacing again.
Historically, investors flock to gold when geopolitical tensions rise to shield their assets from market chaos.
“The advantage of gold is that it provides stability in uncertain times.”
Eric Sepanek
SBC Founder
9. Retail Investor Demand
Central banks might comprise the majority of gold demand in terms of overall value, but retail investors are pulling their weight. Investments in physical gold assets increased throughout 2023, falling in line with 2022 demand, which was the strongest year for almost a decade for this segment. That momentum is expected to carry over in 2024 as distrust in the economy mounts. 70% of Americans feel the economy is worsening, revealing the widespread lack of faith investors have in the financial future of the US. Plus, a recent Gallup poll revealed that more investors think gold is the ideal long-term investment when compared to stocks.
It’s clear people are rapidly losing confidence in the health of traditional markets as the ramifications of feckless government policies permeate the economy. Investors have been shifting their focus from growth to protection by moving from paper-backed assets to physical gold and silver coins, gold bars, and silver bars.
“Ever since the pandemic, we've seen an increase in demand for both gold and silver...and very few sellers.”
Joe Elkjer
Precious Metals Advisor
10. A Crumbling US Dollar
A flurry of economic and political factors threatens to further weaken an already compromised dollar through 2024. The Fed’s plan to cut rates could lead to a divestment of dollar-backed assets as investors seek out high-yielding alternatives. In a poll of over 70 FX experts, the dominant expectation was for the dollar to fall against the G10 currencies in 2024. Meanwhile, the de-dollarization trend is expected to heat up as dozens of economies, led by the BRICS nations, actively decouple from the US dollar.
Unfortunately, most conventional assets, such as stocks, mutual funds, bonds, and ETFs, are directly tied to the US dollar. That means any dollar weakness is instantly reflected in these assets.
“[T]he purchasing power of our dollar is going down. Gold and silver [are] going to be the best place to have your money.”
Todd Graf
Precious Metals Advisor
11. Threat of Digital Dollars
The dystopian future with a fully centralized digital currency wielded as a weapon of Draconian government control is no longer relegated to science fiction novels. The overwhelming majority of governments are actively pursuing developing or implementing a central bank digital currency (CBDC), and nearly a dozen have active programs. This trend is only expected to escalate in 2024 as the relevant technology improves and nations race to develop the most robust financial system. In its 2024 budget request, The White House has explicitly stressed a “high priority on advancing research…that could be helpful to CBDC experimentation and development at the Federal Reserve.”
This rapid development of the digital dollar has many Americans concerned about the potential phaseout of the physical dollar. Gold is viewed by many as the last haven of privacy and anonymity in an increasingly digitized and centralized financial system.
“Physical gold in your possession [is] the original decentralization. [It’s] the true way to get away from these digital currencies.”
Todd Graf
Precious Metals Advisor
3 Reasons Why Gold Is Always a Good Long-Term Investment
Gold is the ‘gold standard’ of investments, such a time-honored investment that its very name is synonymous with excellence. But sadly, the ‘gold standard’ in regard to the American dollar ended fifty years ago when President Richard Nixon made it official and detached the dollar from its gold backing. The dollar became a currency valued simply by its relation to other currencies across the globe. Thus, while the dollar began its descent, gold remained, as it typically does, relatively stable regardless of outside factors.
Today, gold is what smart money investors turn to in times of economic instability or when the markets seem more volatile than usual. Investing in gold as a hard asset also has many upsides in addition to hedging against inflation.
1. Diversification
Diversifying your portfolio is always a good strategy in times of economic uncertainty, or anytime for that matter. As the correlation between stocks and gold is close to nil, gold is the ideal choice for turbulent economic times. Gold has a history and has long been regarded as a safe haven investment for precisely the fact that its value endures. Thus, gold is an optimum investment for portfolio diversification, especially if you are invested heavily in paper stocks that can shift rapidly based on geopolitical events, the state of the U.S. economy, and so much more.
2. Refuge from The Grand Experiment
It’s no secret that the actions taken by the Federal Reserve sometimes produce economic effects counter to their supposed intentions. Their experiment has allowed for the U.S. debt to rise to insurmountable levels. With an economy that fluctuates wildly based on policies that shift every four to eight years, gold provides peace of mind, a refuge from the whims of politically-influenced economic decisions. Gold, you can count on, at times when you can’t depend on the transitory value of that paper in your wallet and bank accounts.
3. Liquidity
As a hard asset gold is a top investment to consider due to its high liquidity. It’s easy to purchase, and easy to sell, so if you’re experiencing a temporary cash flow problem you can quickly sell off a portion of your asset holdings to reclaim financial solvency. This makes it an ideal investment as gold has a history of holding its value over time and is there when you need it, unlike some potentially riskier investments in stocks, start-ups, oil & gas, etc. Wall Street stocks can rally and fall, timing is often key, and it’s possible for a stock to bottom out, but gold, though it may dip, has never gone to zero. Gold is just plain dependable and has a track record through history of being one of the most stable assets for every investor’s portfolio.
Gold Investment Options
Of course, gold is also available in forms other than a hard asset like gold coins and gold bars that you purchase and store in a secure vault. If you want the security of gold but prefer not to be responsible for holding it, you could consider:
- Digital gold – which is an electronic money backed by real gold reserves.
- Gold exchange-traded funds (ETFs)
- Gold mining stocks
- Gold mutual funds
📚 Related Reading: Different Types of Paper Gold Assets: Pros and Cons
Additionally, there are several other things to consider before investing this way. Learn what those are in our FREE GOLD INVESTMENT GUIDE.
Also, when it comes to physical gold investing, not all physical gold products are the same. Investment grade coins may have an even greater upside potential for gold investors as their rarity can drive value up, even when gold prices are down, whereas the value of bullion is generally linked to weight and the spot price of gold. To find out more about why investment grade coins could be your best choice, read: Bullion vs. Numismatic Coins: What You Should Know Before Investing.
Whichever form you decide to purchase or invest in will offer its unique advantages and disadvantages, but the bottom line is that gold is a solid, no pun intended, investment that has been around and will be around, for a long time. Do your research and you’ll likely agree that gold is an investor’s ideal option for securing a financial portfolio.
Don’t Wait to Buy Gold—Buy Gold and Wait!