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Gold has long been considered a smart investment. Thanks to its ability to hedge against inflation, diversify portfolios, act as a safe-haven asset and remain steady in value, the precious metal has been relied on for decades by investors. And in today’s unique economic climate, in which inflation is sticky and interest rates are high, it’s been particularly advantageous to invest in the metal. Investing in gold actually hit an 11-year high last September in light of these developments.
The price of gold has also surged in recent months, breaking numerous price records since March 1, when it was $2,082.55 per ounce. It’s now selling for $2,316.06 per ounce, or more than 11% percent higher, in barely 60 days. But with interest rates held steady by the Federal Reserve on May 1 and another inflation report expected to be released on May 15, economic factors could affect gold’s price this month.
So, those expecting the price to drop — and an opportunity to invest to arise — should start by considering the likelihood of gold’s price falling this May.
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Will gold’s price fall in May? What to consider now
While predicting the price of any investment is highly speculative, there are some indicators that not only will gold’s price not fall in May, but it could actually rise. Here’s what to consider now:
Inflation is stubborn
Inflation has fallen significantly from a decades-high in June 2022, but it’s still not at the Federal Reserve’s target 2% goal. And, it ticked back up in February and March. If the inflation report for April (scheduled to be released May 15) shows it is increasing once again, the price of gold could rise in tandem.
Because gold is so well known as an inflation hedge (for when other assets suffer from inflation), more investors could turn to the metal after the latest inflation numbers are released, thus causing the price to rise. It makes sense, then, to buy in now before the cost becomes prohibitive.
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The price has already been rising
Sure, there have been some day-to-day drops in the price of gold. But, as noted, the price of gold has been on an overall steady upward trend in recent months and many experts don’t expect that to be curtailed anytime soon.
“Gold will continue to stay very high over the next year and possibly trade higher during the next couple of years,” Alex Ebkarian, co-founder of Allegiance Gold, a gold IRA company, recently told CBS News.
Could something change that affects this increasing price? Sure. But if recent performance is any indicator, this May will not be the month to expect a drop in price for the metal.
It’s ubiquitous
Gold is arguably more available now than it’s ever been. You can turn to top gold companies online to get invested today or you can head down to a local dealer to buy it in person. Even big retailers like Costco and Walmart are selling gold and silver now — and the former quickly sold out when they got started last summer.
So what does the ubiquitous nature of the metal mean for its price this month? That’s really in the eye of the investor. The multitude of options to invest now means that there’s demand, which could increase the price. At the same time, if it’s less scarce and easier to come by, the price could level off. This is something to keep in mind as you get involved in the gold investing sector now.
The bottom line
No one knows for sure what will happen to the price of gold this month, but if recent performance is any indication, it could continue to rise. With inflation stubborn, a recent trend of gold rising in price and the ubiquitous nature of the precious metal right now, there’s a good chance that gold will be worth more on June 1 than it is in early May. So if you want to get started, consider acting now while the price is more manageable and the ability to earn a quick profit is high. But be careful not to overinvest either, as most experts recommend limiting gold to 10% or less of your overall portfolio.
Matt Richardson is the managing editor for the Managing Your Money section for CBSNews.com. He writes and edits content about personal finance ranging from savings to investing to insurance.
