Is Investing in Gold Spot Still a Smart Move?

The gold spot price reflects the current value of an ounce of gold on global markets, excluding additional costs for physical delivery. Buying spot gold today can be a good option for several reasons, depending on your risk tolerance and, above all, your investment objectives. Here are the major points to consider:

Reasons to Buy

1. Safe-Haven Asset: Gold is often regarded as a safe-haven investment during times of economic uncertainty, geopolitical tensions, and high inflation — conditions we’re currently experiencing. With central banks printing money to support their economies, the value of currency decreases, prompting investors to favour gold as a means of preserving purchasing power. In 2024, heightened international tensions also contributed to increased gold demand, explaining its remarkable price surge.
2. Interest Rate Impact: If central banks, like the Federal Reserve, lower interest rates, this could lead to higher gold prices, as yield less return. Many analysts expect further price increases in the short to medium term.
3. Price Projections: Initial projections for 2024 suggested gold could reach between $2,200 and $2,500 an ounce, but it has already surpassed that, with the spot price nearing $2,700 — an all-time high! Optimistic forecasts for 2025 suggest prices could reach up to $3,000.

Limitations to Consider

1. Price Volatility: While gold might go up in the long term, its price can be volatile due to fluctuations in the dollar, interest rates, and geopolitical developments, making forecasts somewhat unpredictable.
2. No Income Generation: Unlike stocks or bonds, gold does not pay dividends or interest. The main advantage lies in its inherent value, making it less suitable for those seeking quick gains.

Gold plays a major role in central bank reserves. In 2024, several countries, including China and Russia, increased their gold reserves to diversify their holdings, thereby boosting demand and supporting prices.

Should You Buy Gold?

Gold spot remains a worthwhile asset for investors looking to safeguard against economic uncertainties. Although prices are currently at their peak, medium-term forecasts suggest that they will keep rising.

In short, investing in gold could be a wise decision if you aim to hedge your portfolio against inflation or economic instability without seeking immediate profits.