Equity market volatility and renewed concerns about economic growth may prompt some investors to carefully consider buying gold. Those who already own gold may sleep a little easier this week. With the stock market down sharply from its highs, spot gold has outperformed the overall stock and bond markets so far this year. What’s surprising is that gold has performed so well despite a year in which the Federal Reserve’s benchmark interest rate is above 5%, which is bad news for non-yielding gold. But things could turn in gold’s favor going forward. “Gold has weathered a big test of a high interest rate environment. Now the interest rate environment is going to be lower. The economy is weakening. So now is the time for gold to really start to take effect,” said John Davi, CEO and chief investment officer at Astoria Portfolio Advisors. Bitcoin is set to continue outperforming gold in 2024, likely due in large part to the emergence of new ETFs, but so-called “digital gold” fell about 14% in August (physical gold fell just 2%) and tends to sell off along with other risk assets during times of stress. If economic conditions continue to weaken, gold could overtake major cryptocurrencies to become the best-performing major asset this year. Dhabi said his firm typically gets exposure to gold through the SPDR Gold MiniShares Trust (GLDM) and the Abdul Physical Precious Metals BasketShares ETF (GLTR).
Gold could be the best investment of 2024
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