While global stock markets are heading into uncharted territory, there is another asset class attracting the attention and interest of investors: gold. Gold prices rose earlier this month to trade at over $1,850 per ounce, approaching the psychological level of $1,900, and with continued uncertainty related to the coronavirus pushing the precious metal higher, some experts suggest that gold may reach new highs. Which has made many people wonder if now is the right time to invest. Why is gold rising? Gold is up about 19% year to date, as lower interest rates and central bank stimulus add to the precious metal's current bullish momentum. Gold is typically seen as a 'safe haven' asset in times of uncertainty because it is less volatile than other investments such as stocks. Furthermore, the metal moves inversely against the US dollar, meaning that when the dollar moves lower as it currently does, gold rises. Despite the rise in coronavirus cases and worsening economic data, stock markets continued to rise supported by massive monetary stimulus, but it also caused gold to enter a new trading zone. Prices are about to go up As the pandemic hit markets in late March, gold also suffered a sell-off as investors rushed to free up liquidity. But since then, investors have turned to gold because it acts as a safe store of money, and this year so far, flows of gold-backed exchange-traded funds (ETFs) globally have reached about $12 billion. This is what made investors keep gold in... trading account Their own, as a result of expectations of higher volatility in the future and gold testing the level of $ 1900 an ounce again in the near term, while Bank of America expected gold to reach its highest levels ever, in April the bank said that gold is likely to reach a new record level at $ 3000 per ounce driven by continued uncertainty in the coming years. Is it a good time to buy? Most analysts believe that the bull market will see gold in the coming years, which will raise the rate of potential returns, and this raised the question about the date of purchase. In fact, there is no suitable time to buy gold, as every investor should work to diversify his investment portfolio, which includes some gold, Usually, financial experts advise to allocate a ratio between 1% and 5% for gold from the total investment portfolio. How do you invest? While gold is one of the oldest forms of currency in the world, there are multiple ways to hold the precious metal for investment purposes. 1. Physical purchase: Gold bars and coins are the traditional way to own gold, they are highly liquid and easy to buy and sell anywhere, but buyers should be aware of additional costs such as insurance and storage. 2. Purchasing gold-backed exchange-traded funds:They are tools that allow you to track the underlying price of gold without having to physically hold the asset, so if you just want to trade the price of gold this might be the best option. 3 .Buying gold-linked stocks: Such as gold miners or gold producers which is another way to hold gold because it tends to reverse its performance, yet it is also subject to stock market volatility. 4. Buying alternatives: Alternative vehicles such as gold-backed cryptocurrencies or forex trading provide another way to buy in gold, although they are usually for more experienced investors.
A professional technical and economic analyst in global financial markets since 2004. He holds a Master’s in Business Administration from the American University in Cairo. He works as an economic writer and technical analyst for many international financial companies. He writes daily economic and technical analyzes for many Arabic and English websites specialized in the field of stock exchanges and financial markets.
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