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The Current State of Gold Prices

As of the writing of this article, gold seems poised to push past its all-time high price of $2,072.50 per ounce. In May 2023, the price of gold reached as high as $2055.70 per ounce, less than $17 shy of breaking its record.

Will gold continue to climb? Many analysts are expecting big things. A recent report by CNBC suggests that gold has room to rise to $2,600 an ounce in the coming months. Another report by the same institution predicts that gold may hit $4,000 per ounce in 2023.

What’s causing gold’s sudden upward trend, and why do so many analysts believe it may surge? A few factors are currently affecting gold prices.

First, the Federal Reserve is suggesting an end to interest hikes. The Fed has been raising interest rates to combat inflation. But according to Reuters, it toned down this policy in March 2023, suggesting that an end to interest hikes is on the horizon. Gold is known to be an inflation hedge, meaning that while inflation reduces the purchasing power of the dollar, the price of gold tends to hold steady or even rise. With the Fed halting the interest rate hikes meant to control inflation, analysts believe gold prices may surge.

Second, there have recently been concerns—and even suggestions—of a new banking crisis. The collapses of Silicon Valley Bank, Signature Bank, and First Republic Bank, along with the near-collapse of Credit Suisse, have reduced confidence in the banking system. When consumers lose their trust in banks, they often store their wealth elsewhere, such as in precious metals like gold coins and bars.

Finally, consider the rising demand for gold from central banks. Geopolitical unrest, such as the Russia/Ukraine conflict, has contributed to central banks around the globe buying gold aggressively. Russia’s central bank purchased about one million ounces of gold in the past year. These large gold purchases increase the demand for gold worldwide, helping drive the asset’s price up.

Why Buy Gold?

Gold has long been considered a safe-haven asset during times of economic or political insecurity. It’s also a common asset for portfolio diversification because of its stability against market volatility. Many finance experts recommend that gold and other precious metals make up as much as 20% of your portfolio.

Gold often exhibits a low correlation with traditional assets such as stocks and bonds. This means that when stock markets face a downturn, gold prices might not be affected or could even rise. Including gold in your portfolio can help reduce volatility and potentially increase returns over time.

Gold may also act as a hedge against inflation. With recent historic spikes in inflation around the globe, gold has become a reactionary buy for those who wish to shield their wealth. As the cost of goods and services increases, the purchasing power of your money may decrease. Gold may help protect your savings during these turbulent times.

Gold has proven resilient to economic challenges in the past, including the Great Recession in 2008 and the COVID-19 pandemic. During both downturns, the price of gold surged. By buying gold and other precious metals when economic uncertainty looms, you may be able to take advantage of a similar surge in price or protect your wealth from market volatility.

U.S. Money Reserve: America’s Gold Authority®

It’s critical to work with a reputable precious metals distributor when buying gold. The safety of your assets and your financial future may depend on it. U.S. Money Reserve is proud to have served more than 700,000 clients around the globe.

One of the nation’s leading precious metals distributors, U.S. Money Reserve maintains a thought leadership team that includes two former Directors of the U.S. Mint. The company’s trusted leadership and dedication to personalized, one-on-one customer service have earned it a sterling reputation. It has industry-topping ratings by consumer trust agencies, including an A+ rating by the Better Business Bureau (BBB) and an AAA rating by the Business Consumer Alliance.

The company offers an extensive range of high-quality precious metals products, such as gold bullion coins and bars, many of which are government-minted and backed for their metal content, weight, and purity.

If it’s your first time buying gold, a U.S. Money Reserve Account Executive is ready to answer all of your questions in a no-pressure environment, and hundreds of free educational resources are available to help you become a confident gold buyer. All you have to do is schedule a call with an Account Executive to learn about how you can best take advantage of physical gold before the precious metal sees another rise in prices.

Disclaimer: The company is not affiliated with the U.S. Government and the U.S. Mint.