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When should you sell your gold investment?
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Amidst a backdrop of high inflation and the subsequent high interest rates meant to temper it, many investors decided to buy gold. That uptick in demand for gold investment helped contribute to a run-up in the metal’s price, with gold reaching a record high of over $2,350 per ounce as of April 10.
With this recent high, many of those who decided to invest in gold and have experienced gains may now be wondering whether they should sell their gold investment or wait for a future event that could prompt them to sell. So what’s the right time to sell your gold investment? Here’s what you should know.
Find out what your top gold investing options are now.
When should you sell your gold investment?
While the answer to this question depends on your situation, such as your desire for portfolio diversification and your outlook on various asset classes, some scenarios where you might decide to sell your gold investment include:
When inflation cools
Gold is considered an inflation hedge, and if you think inflation has already tempered or will be soon, that might prompt you to sell your gold investment. This could be especially true if you increased your gold allocation relative to other assets due to recent conditions.
“Gold has been in demand as an investment in times of high inflation and political instability,” says David Kass, clinical professor of finance at the University of Maryland.
With gold hitting new price peaks and “with inflation being reduced close to target levels of about 2% in both the United States and abroad, it would appear that now would be a good time for investors to reduce their stakes in this precious metal and return to their normal asset allocation,” he adds.
Explore how gold could add value to your investment portfolio today.
When economic conditions are less uncertain
Related to inflation normalizing, you might decide to sell your gold investment if you think that economic conditions will be more stable or positive going forward.
“Any major reduction in latent uncertainty is likely to be followed by a decline in the demand for, and thus prices for, gold,” says Peter C. Earle, senior economist at the American Institute for Economic Research.
“If an emergency subsides, or if questionable prospects for economic growth suddenly resolve into positive circumstances — for example, if an uncertain inflationary picture of the future shifts to suggest stable prices in the near term — the price of gold may fall suddenly,” he adds.
When gold’s value is too far out of sync with other precious metals
While gold’s value doesn’t exactly track that of other precious metals, like silver, there’s often a correlation between them. And if things get too out of sync, that might prompt you to consider selling gold.
Currently, the gold/silver ratio, which is based on the price of gold divided by the price of silver, is around 88, “where historically it has averaged in the mid-to-high 60s, indicating a possible overvaluation of gold relative to silver,” explains Rohan Reddy, director of research at Global X ETFs.
However, it’s important to remember that a high ratio doesn’t automatically mean gold is or isn’t overvalued, as there can be other drivers. Yet low prices for other precious metals could be a sign of economic trouble.
“The sources of demand for other precious metals like silver, platinum, and palladium are greatly influenced by other industrial applications, and their relative price performance may signal other factors in the global economy,” says Reddy.
When gold prices don’t track fundamentals
Investment prices can be based on fundamental factors, i.e., those that indicate a fair value for an asset, or they could be based on technical factors, like a market rally that indicates rising prices.
For gold, fundamentals could include factors like bond yields. In many cases, high bond yields temper gold prices, as investors may want to earn predictable returns that way rather than speculating on the price of gold.
So, when gold gets too separated from fundamentals, that could be a reason for selling your gold investment.
“Gold performed surprisingly well in 2023, despite prevailing market conditions that have historically been unfavorable for the asset class. Despite slowing inflation and increasingly competitive real yields, gold saw its value persevere despite historic correlations that indicate it should have fared otherwise,” says Reddy.
“We’ve seen much of the recent rally being driven by technical factors, predominately by global central banks buying to diversify reserves. In theory, this buying has its limits, which may implore investors to consider selling while gold prices remain bid up,” he adds.
The bottom line
These different scenarios could prompt some investors to sell some or all of their gold investments, but these aren’t strict rules to follow. Much of this decision depends on your circumstances, such as your investment goals, time horizon and risk tolerance, along with your outlook on gold value compared to other assets. And just because gold has reached a record high that doesn’t mean that it can’t continue to increase in value.
An American climber was rescued after she and another alpinist from the U.K. were stranded for two days at more than 20,000 feet in the Himalayan mountains.
Michelle Dvorak, 31, and Fay Manners, 37, went missing on Thursday after their equipment and food tumbled down a ravine while trekking up India’s Chaukhamba mountain, CBS News partner BBC reported.
The pair sent an emergency message but search and rescue teams were unable to find them.
INDIAN AIR FORCE/Handout via REUTERS
Manners told the BBC they were “terrified” as they tried to make part of the descent down the treacherous mountains without supplies.
“I watched the bag tumble down the mountain and I immediately knew the consequence of what was to come,” she said. “We had none of our safety equipment left. No tent. No stove to melt snow for water. No warm clothes for the evening.”
The terrifying ordeal intensified when it started to snow. They took cover on a ledge while waiting for rescuers.
“I felt hypothermic, constantly shaking and with the lack of food my body was running out of energy to keep warm,” Manners said.
The rescue was made difficult because of the conditions, including bad weather, fog and high altitude.
“The helicopter flew passed again, couldn’t see us. We were destroyed,” Manners told the BBC.
INDIAN AIR FORCE/Handout via REUTERS
On the second day, the pair began to cautiously abseil down the mountain. They spotted a team of French climbers coming toward them. Manners said they shared their equipment and food and contacted the helicopter company with an exact location.
“I cried with relief knowing we might survive,” she said.
The Indian Air Force said in a post on the X social media platform that their helicopter airlifted the climbers from 17,400 feet after “battling two days of bad weather.”
Chaukhamba is a mountain massif in the Garhwal Himalaya in northern India.
President Biden approved the mobilization of another 500 active-duty troops to North Carolina to assist in the recovery efforts after the deadly and devastating Hurricane Helene.
“With a total of 1,500 troops now supplementing a robust on-the-ground effort – including more than 6,100 National Guardsmen and more than 7,000 Federal personnel – the Biden-Harris Administration is mobilizing all relevant resources to support families as they begin their road to rebuilding,” the White House said in a statement Sunday.
Mr. Biden previously announced that the federal government would cover “100%” of costs for debris removal and emergency protective measures in North Carolina for six months. The Biden administration has also released more than $137 million in federal funds – including $100 million in transportation funds for North Carolina to begin rebuilding damaged roads and bridges.
Mike Stewart / AP
More than 800 people unable to return home are staying in lodging provided through FEMA, and 22 shelters are still housing nearly 1,000 people as mobile feeding operations continue to help survivors.
“My Administration is sparing no resource to support families as they begin their road to rebuilding,” Biden said. “We will continue working hand-in-hand with local and state leaders – regardless of political party and no matter how long it takes.”
Earlier Sunday, North Carolina Sen. Thom Tills called for more resources to bolster the relief effort and likened the damage to Hurricane Katrina’s mark on Louisiana in 2005.
“The scope of this storm is more like Katrina,” he told CBS News’ Margaret Brennan on “Face the Nation with Margaret Brennan”. “It may look like a flood to the outside observer, but again, this is a landmass roughly the size of the state of Massachusetts, with damage distributed throughout. We have to get maximum resources on the ground immediately to finish rescue operations.”
Mr. Biden, Vice President Kamala Harris and former President Donald Trump have all traveled to some of the impacted regions.
Hurricane Helene caused catastrophic damage from Florida into the Appalachian mountains and killed more than 225 people across multiple states. That number includes 114 killed in North Carolina alone.
The White House said Mr. Biden has also been briefed on Hurricane Milton, which is forecast to make landfall in Florida’s Tampa Bay area as a major storm on Wednesday.
U.S. disaster relief chief blasts false claims about Helene response
Deanne Criswell, who leads the Federal Emergency Management Agency, said on Sunday that the recent false claims and conspiracy theories about the federal response to the storm are “demoralizing” aid workers.
“It’s frankly ridiculous, and just plain false. This kind of rhetoric is not helpful to people,” she said. “It’s really a shame that we’re putting politics ahead of helping people, and that’s what we’re here to do. We have had the complete support of the state,” she said, referring to North Carolina.
Joe Raedle/ Getty Images
Republicans, led by Trump, have helped foster a frenzy of misinformation over the past week among the communities most devastated by Helene, promoting a number of false claims, including that Washington is intentionally withholding aid to people in Republican areas.
Trump accused FEMA of spending all its money to help immigrants who are in the United States illegally, while other critics assert that the government spends too much on Israel, Ukraine and other foreign countries.
Tillis, a Republican, on Sunday rejected that claim, telling “Face the Nation with Margaret Brennan” that resources being used on immigration is “not yet … affecting the flow of resources to western North Carolina.”
Tillis said the stream of misinformation about relief efforts in North Carolina is a “distraction.”
“I believe that we have to stay focused on rescue operations, recovery operations, clearing operations, and we don’t need any of these distractions on the ground,” Tillis said. “It’s at the expense of hard-working first responders and people that are just trying to recover their lives.”
Mr. Biden said in a statement Sunday that his administration “will continue working hand-in-hand with local and state leaders –- regardless of political party and no matter how long it takes.”
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