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3 big risks of waiting for gold prices to fall
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Gold has been a standout performer in the financial markets this year, with prices climbing rapidly and setting new records. At the start of the year, gold was trading at just above $2,000 per ounce, but its value has soared past multiple milestones in recent months, and, today, gold prices hover above $2,650 per ounce. This upward trend has resulted in big rewards for early investors who saw the precious metal as a safe haven in uncertain economic times. Those who got in before prices surged are now enjoying substantial gains.
For investors who have yet to buy gold, though, the current high prices present a dilemma. Many are hesitant to jump in at a time when the price is near a record high and are instead waiting in hopes that prices will retreat, allowing them to purchase gold at a discount. This cautious approach makes sense in traditional investing logic. After all, buying low and selling high is the golden rule. But in the case of gold, waiting for lower prices may not be as wise as it seems.
While it’s tempting to wait for a price drop, the reality is that this gold investing strategy could be fraught with risks — especially right now. Below, we’ll analyze why.
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3 big risks of waiting for gold prices to fall
Waiting for gold’s price to drop could be a risky bet for the following reasons:
Gold’s price may not drop substantially
One of the primary risks in waiting to buy gold at a lower price is the possibility that the anticipated dip may never happen — or may not be as substantial as you hope. Recent trends in the gold market have shown that while gold’s price may experience short-term fluctuations, these dips have not been drastic. Part of the reason is that gold tends to be highly resilient historically, particularly in times of economic uncertainty, like what we’re facing today. Economic issues tend to push the price of gold higher rather than lower.
Even when gold prices have dipped recently, those drops have been short-lived, bouncing back quickly. In some cases, these dips have been quickly followed by the price of gold reaching new highs. This pattern makes it difficult to predict the market. So, waiting for a significant drop could mean missing out on the chance to buy gold at all. If the price continues to rise — and analysts are already predicting that it will — those waiting for a cheaper entry point could be left empty-handed.
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Your portfolio could be vulnerable without it
Gold has long been considered a hedge against stock market volatility, economic downturns and inflation. And while the stock market has performed well recently, it has experienced heightened volatility in recent months. This matters because when the market underperforms or experiences wild fluctuations, gold tends to shine as a stable store of value. This makes gold an essential component of a well-balanced investment portfolio, providing a level of protection against broader market risks.
If you delay investing in gold while waiting for lower prices, you may leave your portfolio vulnerable to future market shocks, should they occur. Gold provides a critical layer of security during such times, and without it, your portfolio may be overly exposed to short-term market shocks that gold could have helped to cushion.
You could miss out on quick returns
While gold is often viewed as a long-term investment, it also presents opportunities for short-term gains, particularly in today’s rapidly rising market. While the price is currently high, many analysts believe that gold’s price is far from reaching its peak — and some experts predict that it could soon hit $3,000 per ounce or higher. If this upward trend continues, buying now — even at the current high prices — could result in significant profits in the near future.
By waiting for a price drop, though, you may miss out on these potential gains. Market timing is notoriously difficult, and even if gold prices were to dip slightly, the price could quickly rebound, leaving those who waited with no opportunity to benefit from the current rally. Investing in gold now could allow you to take advantage of the potential for short-term profits while also securing a position in a valuable long-term asset. And if gold continues to climb, today’s prices may soon seem like a bargain.
The bottom line
Investing in gold has long been a strategy for preserving wealth and protecting portfolios against volatility, so it makes sense to add it to your portfolio, but if you’re waiting for lower prices to enter the market, that may not be the most prudent approach. The price of gold may not drop substantially and delaying your investment could leave your portfolio vulnerable to stock market fluctuations. You might also miss out on an opportunity for both short- and long-term profits. So, given the current trajectory of gold prices and the uncertain economic environment, now may be the right time to consider investing in gold rather than waiting for a dip that may never come.
CBS News
Wisconsin school shooter was in contact with California man plotting his own attack, court documents say
The shooter who killed a student and teacher at a religious school in Wisconsin brought two guns to the school and was in contact with a man in California whom authorities say was planning to attack a government building, according to authorities and court documents that became public Wednesday.
Police were still investigating why the 15-year-old student at Abundant Life Christian School in Madison shot and killed a fellow student and teacher on Monday before shooting herself, Madison Police Chief Shon Barnes told the Associated Press Wednesday. Two other students who were shot remained in critical condition on Wednesday.
A Southern California judge issued a restraining order Tuesday under California’s gun red flag law against a 20-year-old Carlsbad man. The order requires the man to turn his guns and ammunition into police within 48 hours unless an officer asks for them sooner because he poses an immediate danger to himself and others.
Carlsbad is located just north of San Diego.
According to the order, the man told FBI agents that he had been messaging Natalie Rupnow, the Wisconsin shooter, about attacking a government building with a gun and explosives. The order doesn’t say what building he had targeted or when he planned to launch his attack. It also doesn’t detail his interactions with Rupnow except to state that the man was plotting a mass shooting with her.
CBS’ San Diego affiliate KFMB-TV reported that law enforcement searched the man’s home Tuesday night after the order was signed by the judge.
Police, with the assistance of the FBI, were scouring online records and other resources and speaking with the shooter’s parents and classmates in an attempt to determine a motive for the shooting, Barnes told the AP.
Police don’t know if anyone was targeted in the attack or if the attack had been planned in advance, the chief said. Police said the shooting occurred in a classroom where a study hall was taking place involving students from several grades.
“I do not know if if she planned it that day or if she planned it a week prior,” Barnes said. “To me, bringing a gun to school to hurt people is planning. And so we don’t know what the premeditation is.”
On a Madison city website providing details about the shooting, police disclosed Wednesday that two guns were found at the school, but only one was used in the shooting. A law enforcement source previously told CBS News the weapon used appears to have been a 9 mm pistol.
Barnes told the AP that he did not know how the suspected shooter obtained the guns and he declined to say who purchased them, citing the ongoing investigation.
No decisions have been made about whether Rupnow’s parents might be charged in relation to the shooting, but they have been cooperating, Barnes told the AP.
Abundant Life is a nondenominational Christian school that offers prekindergarten classes through high school. About 420 students attend the institution.
The Dan County Medical Examiner’s Office identified the two people killed Wednesday as 42-year-old Erin West and 14-year-old Rubi Vergara.
An online obituary on a local funeral site stated Vergara was a freshman who leaves behind her parents, one brother, and a large extended family. It described her as “an avid reader” who “loved art, singing and playing keyboard in the family worship band.”
West’s exact position with the school was unclear.
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A teacher and student killed in a shooting earlier this week at a school in Madison, Wisconsin, were identified Wednesday by authorities.
The Dane County Medical Examiner’s Office said in a news release provided to CBS News that 42-year-old Erin West and 14-year-old Rubi Vergara were fatally shot Monday morning at Abundant Life Christian School.
Preliminary examinations determined the two died of “homicidal firearm related trauma.” Both were pronounced dead at the scene, the medical examiner said.
An online obituary on a local funeral site stated Vergara was a freshman who leaves behind her parents, one brother, and a large extended family. It described her as “an avid reader” who “loved art, singing and playing keyboard in the family worship band.”
West’s exact position with the school was unclear.
The medical examiner also confirmed that a preliminary autopsy found that the suspected shooter, 15-year-old Natalie Rupnow — a student at the same school — was pronounced dead at a local hospital Monday of “firearm related trauma.” Madison Chief of Police Shon F. Barnes had previously told reporters that Rupnow was pronounced dead while being transported to a hospital.
Police had also previously stated that she was believed to have died from a self-inflicted gunshot wound.
The shooting at the private Christian K-12 school was reported just before 11 a.m. Monday. In addition to the two people killed and the shooter, six others were wounded.
Police said the shooting occurred in a classroom where a study hall was taking place involving students from several grades.
A handgun was recovered after the shooting, Barnes said, but it was unclear where the gun came from or how many shots were fired. A law enforcement source said the weapon used in the shooting appears to have been a 9 mm pistol.
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