CBS News
Gold prices are falling. 5 smart moves to make now
Getty Images/iStockphoto
Over the last few months, investors have been flocking to the gold market to try and capitalize on the precious metal’s seemingly endless uptick in price. The price of gold began climbing earlier this year but went into overdrive in March, with the price of gold hitting its first record of the year on March 8 — prompting more investors to buy in. And, that trend continued into April, with gold’s price ascending to another high on April 1 before outperforming the prior record once again in late May.
The upward price trajectory for gold didn’t stop there, though. On July 18, the price of gold climbed to over $2,472 per ounce, its latest record high. However, the price of gold has moderated somewhat since that point, dropping from nearly $2,500 an ounce to where it sits today at $2,371.45 per ounce (as of July 26, 2024). That’s a decline of about 4% in just over a week.
And, with the cooling inflation rate and the upcoming Federal Reserve meeting, gold prices could continue this downward trend, at least over the short term. That’s not necessarily a bad thing, though. While some investors may be wary of today’s falling gold prices, this could be a good entry point.
Find out more about your gold investing options and get started here.
Gold prices are falling. 5 smart moves to make now
Here are a few moves to consider in the current gold market climate.
Seize the opportunity to acquire physical gold
One of the most significant moves to make during a price downturn is purchasing physical gold. As prices fall, the cost of entry for physical gold ownership decreases, presenting an opportunity to acquire tangible assets at a discount. This strategy is particularly impactful for investors who believe in gold’s long-term value as a hedge against inflation and economic uncertainty.
While this approach requires more hands-on management than some alternatives, it also offers direct ownership and control over your investment. So, you may want to consider buying gold coins or bars — but make sure you do so from reputable dealers while ensuring proper authentication. And, storage and insurance costs should be factored into your investment strategy, as these can impact your overall returns.
Learn about the benefits that gold can offer to your investment portfolio.
Open a gold IRA for a tax-advantaged approach
Opening a gold individual retirement account (IRA) is another strategic move you may want to make during this price dip. These specialized accounts allow you to hold physical gold and other precious metals as part of your retirement portfolio, combining the benefits of gold ownership with tax advantages.
By funding a gold IRA when prices are low, you can potentially benefit from long-term appreciation while enjoying tax-deferred or tax-free growth. This approach is particularly impactful for those looking to diversify their retirement savings and protect against potential currency devaluation or economic instability.
Focus on a dollar-cost averaging strategy
If you’re wary of trying to time the gold market bottom, dollar-cost averaging can be a prudent and impactful strategy. This approach involves regularly investing a fixed amount in gold, regardless of its price. By spreading purchases over time, you can potentially lower your average gold cost per ounce and mitigate the risks associated with market volatility.
This matters right now because dollar-cost averaging is especially effective during periods of falling prices, as it allows you to accumulate more gold for the same dollar amount as prices decline. This strategy also helps remove any emotional decision-making from the investment process.
Consider gold mining stocks and gold ETFs
If you would prefer exposure to gold without the complexities of physical ownership, investing in gold mining stocks and gold-focused exchange-traded funds (ETFs) can be a highly impactful move right now. That’s because, during price slumps, gold mining company stocks often experience even steeper declines than gold itself, potentially offering greater upside when the market recovers.
Gold ETFs, on the other hand, provide a more diversified approach to gold investing, tracking the price of gold or a basket of gold-related securities. A big benefit of these investing instruments is that they offer the liquidity of stocks combined with exposure to gold prices. And, this strategy allows you to benefit from gold price movements without the need for storage or insurance.
Diversify your portfolio within the precious metal sector
Diversifying into silver, platinum or palladium can also be a smart move during a gold price slump. After all, these metals often have different price drivers and industrial applications, providing a hedge against gold-specific market fluctuations.
By spreading your investments across various precious metals, you can potentially reduce risk while still maintaining exposure to the sector. Other metals may also be undervalued relative to gold during a gold price slump, offering the potential for outperformance as market conditions shift.
The bottom line
Falling gold prices may seem like a sign to avoid the gold market, but these types of price dips can present significant opportunities — especially for more strategic investors. By focusing on the strategies outlined above and maintaining a long-term perspective, you may be able to turn the current gold price slump into a golden opportunity for portfolio growth and diversification. Just make sure to do your homework first and ensure that any steps you’re taking fully align with both your investment goals and your needs.
Watch CBS News
Be the first to know
Get browser notifications for breaking news, live events, and exclusive reporting.
Watch CBS News
Be the first to know
Get browser notifications for breaking news, live events, and exclusive reporting.
Three Major banks and Zelle rushed to bring a peer-to-peer payment network to market without first ensuring users would be protected against “widespread” fraud, alleges a lawsuit filed on Friday by the Consumer Financial Protection Bureau.
Bank of America, JPMorgan Chase and Wells Fargo ignored customer complaints related to Zelle, users losing hundreds of millions of dollars in scams, the regulatory agency alleges. Zelle is run by Early Warning Services, which is owned by the three banks named in the CFPB’s suit, along with four other financial institutions.
According to the CFPB, bank customers have lost more than $870 million over the seven years Zells has been in operation. Early Warning and the three banks named in the complaint hastily created the payments network to head off rival payment apps including Venmo and CashApp without adequately protecting end users, the suit alleges.
“The nation’s largest banks felt threatened by competing apps, so they rushed to put out Zelle,” Rohit Chopra, the CFPB’s director, said in a statement. “By their failing to put in place proper safeguards, Zelle became a gold mine for fraudsters, while often leaving victims to fends for themselves.”
Zelle blasted the CFPB’s accusations as “legally and factually flawed,” with a spokesperson also suggesting the timing of the suit as “driven by political factors unrelated” to the company.
JPMorgan also accused the agency of pursuing a “political agenda,” stating that the agency was “overreaching its authority by making banks accountable for criminals, even including romance scammers.”
JPMorgan Chase said it prevents nearly $20 billion in fraud attempts each year, and that 99.95% of its transactions are completed without dispute.
A spokesperson for Wells Fargo declined to comment. Bank of America did not immediately respond to a request for comment.
Offered by more than 2,200 banks and credit unions, Zelle has more than 143 million users in the U.S., according to the suit. Customers transferred a total of $481 billion in conducting 1.7 billion transactions during the first half of 2024, the CFPB noted.
Hundreds of thousands of customers filed fraud complaints and were denied assistance by Zelle and the three banks, according to the suit, which noted that some people were advised to contact those behind the fraud to get their money back.
Zelle “has been slow to implement anti-fraud measures, including closing accounts accused of fraud,” Jaret Seiberg, an analyst with TD Cowen Washington Research Group, said in a report, pointing to the CFPB’s allegations. “It also permitted the registration of emails that were impersonating legitimate entities, including Zelle itself.”
Since Zelle launched in 2017, according to the CFPB, JPMorgan Chase received 420,00 customer complaints involving more than $360 million; Bank of America heard from 210,000 customers with more than $290 million in fraud losses; and Wells Fargo tallied $220 million in fraud losses by 280,000 people.
In 2023 Early Warning began refunding money to an undisclosed number of fraud victims amid pressure from lawmakers. In late 2022, Sen. Elizabeth Warren issued a report that found increasing incidents of fraud and scams to be occurring on the popular payment app, with large banks typically reluctant to compensate victims, the Massachusetts Democrat said.
