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As gold’s price falls, investors should remember these 3 things
The price of gold was seemingly on a never-ending price surge throughout most of 2024. Starting the year priced at just $2,063.73 per ounce, the precious metal soared past the $2,700 mark in late October, with many experts predicting that it could surpass $3,000, perhaps before the end of the year. But that price run came to an end in early November, and gold is now sitting under $2,600 with the possibility of further reductions significant right now.
That said, this lower entry price point offers an opportunity for investors who have yet to add gold to their portfolio. But whether you’re just getting started or already have gold as one element of a diversified portfolio, it’s important to remember a few key points, especially now that the price is declining again. Below, we’ll break down three things investors should remember with gold’s price falling.
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What to remember as gold’s price falls
A cooling gold price could cause investors to readjust their strategy but dramatic adjustments may not be needed if investors remember the following three items:
Price drops are common (and often temporary)
A drop from nearly $2,700 to under $2,600 in less than a month may feel substantial, but it’s important to take a longer view of gold. Gold was priced near $2,600 as recently as September, so the price change isn’t as dramatic as it feels. And, more importantly, price drops in the gold market are common – and often temporary. While dips are inevitable, gold tends to move in one steady upward direction. Understanding this historical dynamic, then, investors may be better served by acting now versus waiting for the price to fall much further.
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Gold is a safe-haven asset
While the price of any asset is important, it’s equally as important to remember the traditional functions of gold in a portfolio and that’s not to produce income as much as it is to be a safe-haven asset to protect other, more volatile assets. Gold is an inflation hedge known for providing a buffer when stocks, bonds and even real estate underperform. And that reputation has not been altered by a mere 5% drop in the price in recent weeks, nor is it likely to be different in the future.
The price is unlikely to fall back to where it was
While a price drop of a few hundred dollars may tempt prospective investors to wait for a cheaper, more ideal time to buy in, the price is unlikely to fall back to exactly where it was. Inflation rose slightly in October compared to September’s rate. And, as has been seen in recent years, as inflation has risen, interest in the metal has soared and the price has (generally) risen alongside it. Waiting for this drop to bring the price back to early 2024 levels could be a mistake, then, particularly if you can invest now at a better price than what was widely available in recent weeks.
Learn more about where the price of gold could be heading here.
The bottom line
A lower gold price needs to be evaluated for the pros and cons it offers investors, but it shouldn’t be overanalyzed either. After all, price drops for gold are common and often temporary. And those changes are unlikely to diminish the metal’s ability to serve as a safe-haven asset. Still, it’s unlikely that the price will fall back to where it was earlier this year or even in 2023, so investors waiting for that to happen may want to try a different strategy, particularly now before the metal has a chance to rise in price again with inflation ticking back up. Just remember to follow the traditional gold investing limit of 10% of your overall portfolio to avoid overcrowding your other income-producing assets at the same time.
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Head of Russia’s nuclear defense forces killed in Moscow blast triggered by device hidden in scooter, officials say
Moscow — The head of Russia’s Nuclear, Biological, and Chemical Defense Forces, Lt. General Igor Kirillov, was killed along with his deputy early Tuesday in an explosion in Moscow, Russia’s Investigative Committee said.
An explosive device hidden in an electronic scooter went off outside a residential building as the two men left the structure, Agence France-Presse cites investigators as saying.
“Investigators, forensic experts and operational services are working at the scene,” committee spokesperson Svetlana Petrenko said in a statement. “Investigative and search activities are being carried out to establish all the circumstances around this crime.”
The committee carries out responsible major investigations in Russia.
Kirillov was sentenced in absentia by a Ukrainian court on Dec. 16 for the use of banned chemical weapons in Ukraine during Russia’s military operation in Ukraine that started in Feb. 2022.
Ukraine’s Security Service, the SBU, said it had recorded more than 4,800 uses of chemical weapons on the battlefield since February 2022, particularly K-1 combat grenades.
During the almost 3-year operation, Russia has made small but steady territorial gains to the nearly one-fifth of Ukraine it already controls.
Kirillov had been in his post since 2017, AFP notes.
CBS News
Earthquake rocks Pacific island nation of Vanuatu, deaths feared, U.S. embassy damaged
A powerful earthquake hit the Pacific island nation of Vanuatu Tuesday, smashing buildings in the capital, Port Vila, including one housing the embassies of the U.S. and other nations. A witness told Agence France-Presse of bodies seen in the city.
Dan McGarry, a journalist with the Organized Crime and Corruption Reporting Project based in Vanuatu, told the Reuters news agency in an interview that police said at least one person had been killed and injured people had been taken to hospital.
“It was the most violent earthquake I’ve experienced in my 21 years living in Vanuatu and in the Pacific Islands. I’ve seen a lot of large earthquakes, never one like this,” he said.
The 7.3-magnitude quake struck at a depth of 35 miles, off the coast of Efate, Vanuatu’s main island, at 12:47 p.m. local time, according to the U.S. Geological Survey.
The ground floor of a building housing the U.S, French and other embassies had been crushed under higher floors, resident Michael Thompson told AFP by satellite phone after posting images of the destruction on social media.
“That no longer exists. It is just completely flat. The top three floors are still holding but they have dropped,” Thompson said.
“If there was anyone in there at the time, then they’re gone.”
Thompson said the ground floor housed the U.S. embassy, but that couldn’t be immediately confirmed.
A photo showed significant damage to the building:
The United States has closed the embassy until further notice, citing “considerable damage” to the mission, the U.S. embassy in Papua New Guinea said in a message on social media. “Our thoughts are with everyone affected by this earthquake,” the embassy said.
The New Zealand High Commission, housed in the same building, suffered “significant damage,” a statement from Foreign Minister Winston Peters’ office said, adding that, “New Zealand is deeply concerned about the significant earthquake in Vanuatu, and the damage it has caused.”
Thompson, who runs a zipline adventure business in Vanuatu, said, “There’s people in the buildings in town. There were bodies there when we walked past.”
A landslide on one road had covered a bus, he said, “so there’s obviously some deaths there.”
The quake also collapsed at least two bridges, and most mobile networks were cut off, Thompson said.
“They’re just cracking on with a rescue operation. The support we need from overseas is medical evacuation and skilled rescue, (the) kind(s) of people that can operate in earthquakes,” he said.
Video footage posted by Thompson and verified by AFP showed uniformed rescuers and emergency vehicles working on a building where an external roof had collapsed onto a number of parked cars and trucks.
The streets of the city were strewn with broken glass and other debris from damaged buildings, the footage showed.
Nibhay Nand, a Sydney-based pharmacist with businesses across the South Pacific, said he had spoken to staff in Port Vila who said most of the store there had been “destroyed” and that other buildings nearby had “collapsed.”
“We are waiting for everyone to get online to know how devastating and traumatic this will be,” Nand told AFP.
A tsunami warning was issued after the quake, with waves of up to three feet forecast for some areas of Vanuatu, but it was soon lifted by the Pacific Tsunami Warning Center.
Earthquakes are common in Vanuatu, a low-lying archipelago of 320,000 people that straddles the seismic Ring of Fire, an arc of intense tectonic activity that stretches through Southeast Asia and across the Pacific Basin.
Vanuatu is ranked as one of the countries most susceptible to natural disasters such as earthquakes, storm damage, flooding and tsunamis, according to the annual World Risk Report.
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12/16: CBS Evening News – CBS News
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