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Gold bars and coins vs. gold stocks: Which is better for investors right now?
The price of gold has been on a tear in recent weeks, surging to new heights and captivating investors in the process. After languishing around $1,900 per ounce for much of last year, the spot price of gold is now hovering just under the $2,400 per ounce mark, driven by a potent combination of persistent inflation, elevated interest rates and heightened demand from investors seeking a safe haven for their funds.
This latest gold rush has prompted many to re-examine their investment strategies and weigh how to best capitalize on the precious metal’s price ascent. And, with a diverse array of gold-based assets to choose from, including physical gold bars and coins, gold individual retirement accounts (IRAs), gold futures and options and gold stocks, the question of which option makes the most sense in today’s economic environment has become increasingly relevant.
Considering that physical gold and gold stocks are two of the more popular gold investing options, it makes sense to determine which one is the right move in today’s unusual economic environment.
Explore the benefits of adding gold to your investment portfolio today.
Gold bars and coins vs. gold stocks: Which is better for investors right now?
So, do gold bars and coins or gold stocks make more sense for investors right now? Here’s what you should know.
Why physical gold bars and coins could make more sense today
For investors seeking more tangible and direct exposure to gold, physical bars and coins may be the way to go. Unlike gold-linked financial instruments, physical gold offers the reassurance of direct ownership, with the ability to hold the metal in your possession or store it in a secure facility.
One of the primary advantages of physical gold is its perceived status as a time-tested hedge against inflation and economic uncertainty. As the value of traditional currencies erodes due to rising prices caused by inflation, gold has historically maintained its purchasing power, providing a measure of stability and security for investors. So, in the current climate of high inflation and economic uncertainties, this attribute has become increasingly appealing if you’re seeking to safeguard your wealth.
And, physical gold is not subject to the same counterparty risks that can plague financial instruments like stocks or ETFs. When you own gold bars or coins, you are not relying on the performance of a company or the stability of a financial institution to maintain your investment’s value. This can be particularly reassuring in unusual economic climates, when trust in other assets may be shaken.
However, investing in physical gold also comes with certain drawbacks. Storing and securing the metal can be a logistical challenge, requiring specialized storage facilities or home safes, which can add to your overall cost of ownership. The liquidity of physical gold may also be lower than that of gold-linked financial products, as selling bars or coins may involve more friction and potential transaction fees. So, it’s important to keep those factors in mind when making a decision.
Learn more about the gold investing options available to you here.
Why gold stocks could make more sense today
If you’re more interested in the potential for capital appreciation, gold stocks may offer a more compelling option right now. By investing in the shares of gold mining companies, you can potentially benefit from the underlying rise in gold prices, as well as the operational and financial performance of the companies themselves.
One of the key advantages of gold stocks is their ability to provide leveraged exposure to the gold market. As the price of gold rises, like it is today, the profits and share prices of gold mining companies tend to increase at a faster rate, potentially delivering outsized returns. This can be particularly appealing if you’re seeking to maximize your gains from the current gold rally.
Moreover, gold stocks can offer a degree of diversification that physical gold may lack. By investing in a portfolio of gold mining companies, you can spread your risk across different geographic regions, production profiles and management teams, potentially mitigating some of the idiosyncratic risks associated with individual gold mining companies.
And, gold stocks may offer greater liquidity than physical gold, as they can be traded on public exchanges with relative ease. This can be beneficial if you think you may need to access your capital more quickly or if you prefer the flexibility of being able to buy and sell your holdings on a regular basis.
However, investing in gold stocks also introduces a different set of risks. Unlike physical gold, which maintains its intrinsic value, the performance of gold stocks is heavily dependent on the operational and financial success of the underlying companies. This means if you’re investing in gold stocks, you must not only navigate the volatility of the gold market but also the specific challenges and risks facing the companies you’ve invested in.
The bottom line
Ultimately, the decision between investing in physical gold bars and coins or gold stocks will depend on your risk tolerance, investment objectives and personal preferences. Both options offer unique benefits and drawbacks, however, and if you are focused on building a well-diversified portfolio, you could also incorporate a combination of these gold-based assets to achieve a balance between stability, growth and risk management.
In either case, it would be wise to carefully weigh the merits of each approach, ensuring that your investment strategy aligns with your long-term financial goals and risk appetite. By doing so, you can position yourself to capitalize on the current gold rush and potentially weather the economic storms that may lie ahead.
CBS News
Biden’s top hostage envoy Roger Carstens in Syria to ask for help in finding Austin Tice
Roger Carstens, the Biden administration’s top official for freeing Americans held overseas, on Friday arrived in Damascus, Syria, for a high-risk mission: making the first known face-to-face contact with the caretaker government and asking for help finding missing American journalist Austin Tice.
Tice was kidnapped in Syria 12 years ago during the civil war and brutal reign of now-deposed Syrian dictator Bashar al-Assad. For years, U.S. officials have said they do not know with certainty whether Tice is still alive, where he is being held or by whom.
The State Department’s top diplomat for the Middle East, Barbara Leaf, assistant secretary of state for Near Eastern Affairs, accompanied Carstens to Damascus as a gesture of broader outreach to Hay’at Tahrir al-Sham, known as HTS, the rebel group that recently overthrew Assad’s regime and is emerging as a leading power.
Near East Senior Adviser Daniel Rubinstein was also with the delegation. They are the first American diplomats to visit Damascus in over a decade, according to a State Department spokesperson.
They plan to meet with HTS representatives to discuss transition principles endorsed by the U.S. and regional partners in Aqaba, Jordan, the spokesperson said. Secretary of State Antony Blinken traveled to Aqaba last week to meet with Middle East leaders and discuss the situation in Syria.
While finding and freeing Tice and other American citizens who disappeared under the Assad regime is the ultimate goal, U.S. officials are downplaying expectations of a breakthrough on this trip. Multiple sources told CBS News that Carstens and Leaf’s intent is to convey U.S. interests to senior HTS leaders, and learn anything they can about Tice.
Rubinstein will lead the U.S. diplomacy in Syria, engaging directly with the Syrian people and key parties in Syria, the State Department spokesperson added.
Diplomatic outreach to HTS comes in a volatile, war-torn region at an uncertain moment. Two sources even compared the potential danger to the expeditionary diplomacy practiced by the late U.S. Ambassador Christopher Stevens, who led outreach to rebels in Benghazi, Libya, in 2012 and was killed in a terrorist attack on a U.S. diplomatic compound and intelligence post.
U.S. special operations forces known as JSOC provided security for the delegation as they traveled by vehicle across the Jordanian border and on the road to Damascus. The convoy was given assurances by HTS that it would be granted safe passage while in Syria, but there remains a threat of attacks by other terrorist groups, including ISIS.
CBS News withheld publication of this story for security concerns at the State Department’s request.
Sending high-level American diplomats to Damascus represents a significant step in reopening U.S.-Syria relations following the fall of the Assad regime less than two weeks ago. Operations at the U.S. embassy in Damascus have been suspended since 2012, shortly after the Assad regime brutally repressed an uprising that became a 14-year civil war and spawned 13 million Syrians to flee the country in one of the largest humanitarian disasters in the world.
The U.S. formally designated HTS, which had ties to al Qaeda, as a foreign terrorist organization in 2018. Its leader, Mohammed al Jolani, was designated as a terrorist by the US in 2013 and prior to that served time in a US prison in Iraq.
Since toppling Assad, HTS has publicly signaled interest in a new more moderate trajectory. Al Jolani even shed his nom de guerre and now uses his legal name, Ahmed al-Sharaa.
U.S. sanctions on HTS linked to those terrorist designations complicate outreach somewhat, but they haven’t prevented American officials from making direct contact with HTS at the direction of President Biden. Blinken recently confirmed that U.S. officials were in touch with HTS representatives prior to Carstens and Leaf’s visit.
“We’ve heard positive statements coming from Mr. Jolani, the leader of HTS,” Blinken told Bloomberg News on Thursday. “But what everyone is focused on is what’s actually happening on the ground, what are they doing? Are they working to build a transition in Syria that brings everyone in?”
In that same interview, Blinken also seemed to dangle the possibility that the U.S. could help lift sanctions on HTS and its leader imposed by the United Nations, if HTS builds what he called an inclusive nonsectarian government and eventually holds elections. The Biden administration is not expected to lift the U.S. terrorist designation before the end of the president’s term on January 20th.
Pentagon spokesperson Pat Ryder disclosed Thursday that the U.S. currently has approximately 2,000 US troops inside of Syria as part of the mission to defeat ISIS, a far higher number than the 900 troops the Biden administration had previously acknowledged. There are at least five U.S. military bases in the north and south of the country.
The Biden administration is concerned that thousands of ISIS prisoners held at a camp known as al-Hol could be freed. It is currently guarded by the Syrian Democratic forces, Kurdish allies of the U.S. who are wary of the newly-powerful HTS. The situation on the ground is rapidly changing since Russia and Iran withdrew military support from the Assad regime, which has reset the balance of power. Turkey, which has been a sometimes problematic U.S. ally, has been a conduit to HTS and is emerging as a power broker.
A high-risk mission like this is unusual for the typically risk averse Biden administration, which has exercised consistently restrained diplomacy. Blinken approved Carstens and Leaf’s trip and relevant congressional leaders were briefed on it days ago.
“I think it’s important to have direct communication, it’s important to speak as clearly as possible, to listen, to make sure that we understand as best we can where they’re going and where they want to go,” Blinken said Thursday.
At a news conference in Moscow Thursday, Russian President Vladimir Putin said he had not yet met with Assad, who fled to Russia when his regime fell earlier this month. Putin added that he would ask Assad about Austin Tice when they do meet.
Tice, a Marine Corps veteran, worked for multiple news organizations including CBS News.
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Delivering Tomorrow: talabat’s Evolution in the Middle East
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