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Why you should invest in gold before the June Fed meeting
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The Federal Reserve is scheduled to meet next week, and the decisions made during that meeting could have a meaningful impact on various aspects of the financial market, from the interest rates being offered on credit cards and loans to returns on deposit accounts and bonds.
And, the results of the Fed meeting can also have an impact on the price of gold. After all, gold is considered a safe-haven asset, and the factors that impact financial markets can also have an impact on gold’s price. So, if you’re thinking about investing in gold, you may want to make your move before the Fed meets. Here’s why.
Compare your gold investing options now.
Why you should invest in gold before the June Fed meeting
Here are three reasons you should buy gold before the Fed meeting next week:
Rates could rise, causing the price of gold to increase
When the Fed meets, one topic of discussion will be the federal funds rate, which serves as the benchmark rate for consumer interest rates. The Fed uses its benchmark rate to keep inflation at, or near, its 2% target. When inflation is too low, the Fed may lower its benchmark rate to spur spending and drive price growth. And, when inflation is too high, it may increase the benchmark interest rate to help curb consumer spending and minimize price growth.
In turn, these benchmark rate changes can have an impact on the price of gold. For example, interest rate hikes often lead to higher demand for gold, driving the price up. That’s worth noting because inflation has been persistently higher than the Fed’s 2% target over the last couple of years, which is why the federal funds rate is currently paused at a 23-year high.
And, while the most recent inflation report indicated that inflation has cooled compared to recent highs, the rate was still 3.4% in April, which is significantly higher than the Fed’s target rate. So, a rate hike is one possible outcome of the Fed meeting.
If the Fed increases its federal funds rate, or if there is concern that a rate hike could happen, the price of gold could increase due to an uptick in demand. So, it may be wise to buy gold before the Fed’s June meeting.
Get started with gold investing here before the Fed meets next week.
Gold’s price is currently down from record highs
The spot price of gold is currently $2,347.39 per ounce (as of June 7, 2024). That’s down by about 4% compared to its recent record high of $2,439.98.
And, the price of gold may head back up soon. For starters, not only is the Fed set to meet next week, but other drivers that could push up gold demand are present, too. Inflation is still a cause for concern, and the ongoing geopolitical tensions could also help to drive price growth in the near future.
So, it could be a smart move to invest in gold now while the price is lower than it was a few weeks ago. That way, you may be able to benefit from any future gains.
Gold acts as an inflation hedge and diversification tool
Gold also serves as an inflation hedge and diversification tool for many investors, so if you need an asset that can offer these unique benefits, gold may be a good option.
For starters, gold’s price has historically climbed in tandem with the prices of goods and services when inflation is high. So, adding gold to your portfolio could help to offset inflation-related losses from other assets in your portfolio.
Gold doesn’t typically move in tandem with stocks, bonds and other traditional portfolio assets, either. So, adding it to your portfolio could improve your risk-adjusted returns. And, with potential changes to monetary policy just days away, it may be wise to add gold to your portfolio now.
The bottom line
Next week’s Fed meeting could push the price of gold upward. And, since gold’s price is currently down from its recent record high price, buying it now means you could get it at a discount comparatively. Plus, adding gold to your investments could help protect your portfolio by acting as an inflation hedge and diversification tool. Compare your gold investment options now, before the Fed meets next week.
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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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