Five reasons why gold is a hot commodity

9.27.24 - Five reasons why gold is a hot commodity

Gold last traded at $2,658 an ounce. Silver at $31.63 an ounce.

5 reasons why gold is a hot commodity -Fox Business

Talk about a golden opportunity.

It's no secret gold has been a coveted asset for centuries. Now, in a world of economic uncertainty and financial volatility, investors are sticking with the timeless allure of the precious metal as a safe-haven for their wealth. As traditional investment options face increasing risks, this tangible asset, backed by a track record of stability, remains a reliable investment choice for those seeking to safeguard their financial future.

Even with all gold has to offer, it still has the chance to shine brighter. Here are some reasons investors are keeping a close eye on gold investments in today's economy.

1. Record Prices

The price of gold reached an all-time high on Monday, rallying to $2,630 an ounce. The precious metal is up more than 27% year-to-date, according to UBS Global Wealth Management, with last week's Federal Reserve rate cut, geopolitical tensions and supply constraints all believed to be bolstering the rally.

"We remain Most Preferred on gold in our global strategy, with a target of USD 2,700/oz by mid-2025. Despite the rally, we think gold's hedging properties remain attractive. Alongside physical gold, investors may consider exposure through structured strategies, ETFs, or via gold miner equities," said Solita Marcelli, Chief Investment Officer Americas at UBS.

"Investors, unaccustomed to the volatility of individual commodities, may also consider exposure via an actively managed strategy that seeks to deliver alpha over comparable passive indices," she added.

Just last month, the value of a gold bar weighing 400 troy ounces reached the $1 million mark for the first time ever.

While higher prices might sound like a drawback, it could be an opportune time to capitalize on potential future price growth.