Historically, investors have increased buying precious metals bullion during periods of market instability. That’s because precious metals bullion acts as a haven of value that preserves wealth during tumultuous times.
Recently, however, many market analysts and investors alike have expressed concern we might be entering into an even greater period of volatility. The Federal Reserve confirms this in its latest Financial Stability Report, which cites increasing geopolitical tensions that could lead to supply chain disruptions, declines in asset prices, and significant losses to both businesses and investors.
With potential risks like these on the horizon, it’s no wonder investors are eager to ramp up their precious metals investing. In this article, we cover five strategies for buying precious metals bullion in 2024, focusing on how to use precious metals to protect and diversify your portfolio.
Staying informed about the factors that affect buying precious metals prices is crucial, especially geopolitical developments and global economic indicators. Macroeconomic factors influencing the precious metals market include inflation rates, interest rates, industrial demand, and currency value changes.
Concern over the outcome of the 2024 presidential race has some investors boosting their gold and silver bullion purchases as they prepare for potential market fluctuations that might occur right after the election.
An anticipated change in interest rates is another factor that has caused precious metals prices to surge in 2024. In a recent speech, Federal Reserve Chair Jerome Powell indicated the Fed could lower interest rates three times in 2024 but it is very unlikely to happen with the recent inflation reports.
Either way the price of gold could soar even higher as the returns on bonds and other fixed-income investments drop, thus making gold a more attractive investment option.
Plan Buying Precious Metals Around Market Cycles
As 2024 unfolds, look to buy precious metals on the dips. As we’ve seen over the last 100 years, gold prices fluctuate even in bull markets. Rather than trying to time the market perfectly, consider buying precious metals when prices experience a temporary pullback from recent highs. These retracements represent good buying opportunities for investors.
Look for another buying opportunity the last week of June through the first week of July. Over the last 30 years, data shows these two weeks sometimes represent the lowest points of the year and potentially a good time to enter the market.
One of the biggest advantages of investing in precious metals—such as gold and silver bullion—is the ability to diversify your portfolio. An allocation of precious metals in your portfolio can help reduce your exposure to stock market volatility.
Precious metals include other benefits, such as:
- Protection against inflation
- A safe-haven investment during wars, political crises, or economic downturns
- A tangible asset that can be exchanged for cash if needed
- An accessible marketplace that facilitates buying and selling
To achieve a diversified precious metals portfolio, focus on both gold and silver bullion. Each asset reacts differently depending on market conditions, so holding both metals not only reduces risk but also offers the investor additional growth opportunities.
Unless you’re an experienced precious metals investor, we suggest avoiding platinum and palladium, both of which can be challenging to trade and carry significant risks.
If you’re new to buying precious metals bullion, you’re probably wondering which product is right for you? Ultimately, your choice should be based on your investment goals and liquidity needs.
One of our favorite recommendations at CMI Gold & Silver is physical bullion in the form of gold and silver bars or coins. We like these investment-grade precious metals better than digital investments (such as ETFs, mutual funds, or mining stocks) because of the tangible wealth protection they offer against rising inflation and a declining dollar.
Your decision to invest in precious metal bullion should focus on its strengths as a long-term wealth preservation tool rather than a short-term speculative asset. When you buy precious metal bullion, you gain protection against inflation and economic uncertainties. To make the most of this protection, you should employ a buy-and-hold strategy as opposed to trading quickly in and out of the market.
A long-term gold investment is also a good idea for anyone worried about the value of the U.S. dollar. That’s because gold is a historically stable asset that maintains its intrinsic value due to the metal’s scarcity. Compare this to the U.S. dollar, which has lost 96% of its purchasing power since 1913.
You can use dollar-cost averaging (DCA) as a strategy to reduce volatility risk when you buy precious metal bullion. The method involves buying fixed dollar amounts of precious metals bullion on a regular schedule regardless of the current price.
DCA can diminish the effect of price fluctuations as you buy more precious metals bullion when prices are low and less when prices are high. DCA is especially useful for the new investor because it eliminates the concern over perfectly timing your purchases.
Invest in Precious Metals with CMI Gold & Silver
As we navigate through the growing political and economic uncertainties of 2024, the need for strategically buying precious metals bullion will become more critical for investors intent on wealth preservation. To recap, in this article we’ve highlighted five key strategies for investors to consider when buying precious metal bullion:
- Trend monitoring: Start by monitoring market trends—such as geopolitical developments and economic indicators—that impact bullion prices.
- Diversification: Diversify your portfolio by investing in precious metals like gold and silver, both of which can help you mitigate risk and maximize your growth opportunities.
- Physical bullion: Consider physical bullion in the form of bars or coins over digital investments for wealth protection against inflation and a declining dollar.
- Buy-and-hold: Employ a long-term buy-and-hold strategy for buying precious metal bullion as a wealth preservation tool against inflation and economic uncertainties rather than short-term speculative trading.
- Dollar-cost averaging (DCA): Use dollar-cost averaging by making regular fixed-dollar precious metal bullion purchases to reduce volatility risk and eliminate the need for perfect market timing.
However, should market volatility increase, it might be challenging for investors to know which strategy (or combination of strategies) is best for them. That’s why many investors look for a trusted ally to assist with their investment decisions.
With decades of expertise in selling and buying precious metals, CMI Gold & Silver is uniquely equipped to steer you toward a gold and silver investment strategy that aligns with your financial objectives.
With CMI Gold & Silver, you’ll benefit from:
- A family-owned, family-operated business with over 50 years of precious metals experience.
- A team of 100% non-commissioned brokers that will help you purchase the most ounces for the fewest paper dollars. We will never pressure you to transact.
- The ability to conveniently buy, sell, and trade all the popular forms of gold and silver.
- Selling prices that are among the lowest of all established dealers, and buying prices that are nearly always the highest.
- Free client education to ensure you make informed buying and selling decisions.
Want to discover how CMI Gold & Silver can help you make the precious metals investment that’s right for you? Get started today by signing up for our email/app here.
