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What gold assets should you invest in now that the price has dropped?
For much of 2024, gold seemed unstoppable. The price per ounce steadily climbed from $2,063.73 at the start of the year to over $2,700 by late October, setting the stage for what many investors saw as a golden era. The meteoric rise wasn’t just a reflection of gold’s traditional role as a hedge against inflation or economic uncertainty — it also lured a wave of new investors enticed by the prospect of short-term gains in an asset typically seen as a long-term play.
By early November, however, the winds shifted. The price of gold, which was sitting at a near-record high of $2,736.35 per ounce at the start of the month, experienced a sharp correction, sliding about 6% in a matter of days to settle at $2,574.79 per ounce. This drop in value has left some investors wondering whether this was the start of a more significant decline or just a healthy correction in a market that may have overheated.
While uncertainty clouds the short-term outlook, it’s essential to remember that gold often thrives on volatility. A dip like this can present an excellent opportunity for strategic investors to enter the market or diversify their portfolios. And with gold prices lower than recent highs, certain gold assets may now be more attractive than others. So what types of gold investments make the most sense during a price decline?
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What gold assets should you invest in now that the price has dropped?
There are a variety of options that could allow you to capitalize on today’s lower gold prices while positioning yourself for potential gains when the market rebounds, including:
Physical gold bullion
When gold prices drop, physical gold becomes an obvious starting point for many investors. Buying gold bullion — meaning gold bars or coins — is a straightforward way to own tangible assets. The recent price dip makes it more affordable to acquire physical gold, which is highly valued for its liquidity and universal acceptance, so buying in now could mean getting a bargain on your purchase once the price goes back up. Physical gold also doesn’t depend on financial markets or company performance, making it a safe haven during economic turbulence. It’s also easy to sell, ensuring that investors can liquidate their holdings quickly if they need to.
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Gold ETFs
Gold exchange-traded funds (ETFs) offer an efficient way to invest in gold without dealing with the storage and security concerns that come with physical gold. These funds track the price of the metal and allow investors to buy and sell shares on the stock market, making them an easily accessible option, as buying them can typically be done with an account on an investment platform.
This price decline makes gold ETFs particularly appealing, though, as investors can buy shares at a lower cost and potentially benefit from future price increases. Gold ETFs also provide flexibility and liquidity, enabling investors to adjust their holdings quickly based on market conditions. And for those wary of handling physical gold, these types of ETFs offer an excellent balance of convenience and exposure to gold’s performance.
Gold mining stocks
Investing in shares of gold mining companies can be an indirect way for investors to capitalize on gold’s price movements. After all, these types of companies often see their stock prices rise and fall in tandem with gold prices — but they also benefit from operational efficiencies and other factors that can enhance profitability.
This gold price dip creates an opportunity to buy mining stocks at potentially undervalued levels as well. If gold prices rebound, these stocks may experience amplified gains compared to the physical commodity. Keep in mind, though, that mining stocks carry additional risks related to management, production costs and geopolitical factors, so thorough research is essential before buying in.
Gold royalty and streaming companies
Royalty and streaming companies are another compelling option to consider while the price of gold is down. These companies don’t mine gold directly but instead finance mining projects in exchange for a share of the future production or revenue. This model provides them with steady cash flows and lower operational risks compared to traditional mining companies.
Royalty and streaming companies often perform well during periods of gold price volatility, as their revenues are tied to production volume and market prices. They are also less affected by rising mining costs, making them a relatively stable choice during price fluctuations. So, buying into these companies now could allow investors to lock in gains when gold prices recover.
The bottom line
Gold’s recent price drop is a reminder that even the most stable assets experience fluctuations. However, this decline doesn’t necessarily signal trouble. Instead, it offers a chance to reevaluate your investment strategy and consider adding gold to your portfolio at a more favorable entry point. Whether you prefer the tangibility of physical gold, the convenience of gold ETFs or the growth potential of gold mining stocks, there’s an option to suit every investor’s goals and risk tolerance right now.
CBS News
Trump’s win could sharply raise the cost of electric vehicles. Here’s why.
With President-elect Donald Trump vowing to pull the plug on the $7,500 tax credit for buyers of electric vehicles, one EV maker and its billionaire owner are fully behind the idea and even stand to profit from it.
“Take away the subsidies, it will only help Tesla,” Tesla owner Elon Musk posted in July on X, the social media platform he owns.
The credit granted to buyers of EVs helped make the case for buying the climate-friendlier vehicles, and when an earlier version of the tax credit was done away with several years ago, Tesla cut prices on its cars by about half of the credit its buyers were no longer receiving.
Tesla is the sole automaker to be generating a profit on its U.S. sales. Manufacturing EVs is a losing proposition for Big Three vehicle makers like Ford and General Motors, who sell a fraction of EVs compared with Tesla.
Once the EV tax credit is vanquished, the price of EVs overall might drop, cutting into Tesla’s profits, as opposed to increasing the company’s red ink as it could for legacy automakers still working to get a firmer footing in the EV market. Should traditional automakers scale back on their EV production and sales to curtail the losses, EV shoppers would have even fewer options, benefiting Tesla.
As Musk touted his support for axing the EV tax credit, Tesla’s auto industry rivals signaled the opposite.
The Alliance for Automotive Innovation urged that the tax credit continue, telling lawmakers in an October letter that U.S. manufacturers count on it as they vie with Chinese EV production. Around the world, vehicle makers have poured billions into transitioning to electric cars.
Further, the Zero Emission Transportation Association on Friday called on Trump to reconsider, saying the tax credit has bolstered employment in states that voted Republican, including Ohio, Kentucky, Michigan and Georgia.
“If the United States is going to continue to fight to bring those jobs here and actually compete to win against China, there needs to be a demand signal — like the New Clean Vehicle Tax Credit — aligned with that goal, otherwise we would be undercutting those investments and hurting American job growth,” ZETA Executive Director Albert Gore stated on Friday.
“The potential elimination of the federal tax credit for electric vehicles by the Trump administration — without another form of incentive to replace it — could derail the trajectory of EV sales in the United States,” offered Edmunds analysts.
Trump repeatedly vowed to eliminate what he labeled President Joe Biden’s “EV mandate” as he campaigned for the White House.
While there is no such mandate in federal law, the Inflation Reduction Act passed during President Biden’s term revived the credit for many EV purchases, while also granting low interest loans to manufacturers constructing EV and battery plants.
Trump’s transition team intends to knock out the credit as part of a broader tax-reform measure, according to a Thursday report by Reuters, which cited two sources with direct knowledge of the matter.
The president-elect during his first term attempted to repeal the EV tax credit, which was expanded by President Biden in 2022.
Analysts who track Tesla concurred with Musk’s view that the credit’s demise would only help his company.
“This is a clear negative for the EV industry at first look and would particularly hurt GM, Ford, Stellantis and Rivian,” wrote Wedbush Securities tech analyst Daniel Ives. Conversely, “this will enable Tesla to further fend off competition from Detroit as pricing/scale/scope is an apples-to-oranges when compared to the rest of the auto industry once the EV tax credit disappears.”
Americans looking to buy an electric car should do so sooner rather than later, advised Ivan Drury, Edmunds’ director Insights.
“The federal tax credit combined with slashed prices due to slowed sales momentum has contributed to electric vehicles becoming labeled as some of the best deals on the market in 2024. Now, with production cuts shrinking supply and a fresh wave of demand from those seeking a deal while they still can, it can be all but assured that the price for that EV you’ve been eyeing is going up in the coming months,” Drury stated.
CBS News
Trump win could sharply raise the cost of electric vehicles. Here’s why.
With President-elect Donald Trump vowing to pull the plug on the $7,500 tax credit for buyers of electric vehicles, one EV maker and its billionaire owner are fully behind the idea and even stand to profit from it.
“Take away the subsidies, it will only help Tesla,” Tesla owner Elon Musk posted in July on X, the social media platform he owns.
The credit granted to buyers of EVs helped make the case for buying the climate-friendlier vehicles, and when an earlier version of the tax credit was done away with several years ago, Tesla cut prices on its cars by about half of the credit its buyers were no longer receiving.
Tesla is the sole automaker to be generating a profit on its U.S. sales. Manufacturing EVs is a losing proposition for Big Three vehicle makers like Ford and General Motors, who sell a fraction of EVs compared with Tesla.
Once the EV tax credit is vanquished, the price of EVs overall might drop, cutting into Tesla’s profits, as opposed to increasing the company’s red ink as it could for legacy automakers still working to get a firmer footing in the EV market. Should traditional automakers scale back on their EV production and sales to curtail the losses, EV shoppers would have even fewer options, benefiting Tesla.
As Musk touted his support for axing the EV tax credit, Tesla’s auto industry rivals signaled the opposite.
The Alliance for Automotive Innovation urged that the tax credit continue, telling lawmakers in an October letter that U.S. manufacturers count on it as they vie with Chinese EV production. Around the world, vehicle makers have poured billions into transitioning to electric cars.
Further, the Zero Emission Transportation Association on Friday called on Trump to reconsider, saying the tax credit has bolstered employment in states that voted Republican, including Ohio, Kentucky, Michigan and Georgia.
“If the United States is going to continue to fight to bring those jobs here and actually compete to win against China, there needs to be a demand signal — like the New Clean Vehicle Tax Credit — aligned with that goal, otherwise we would be undercutting those investments and hurting American job growth,” ZETA Executive Director Albert Gore stated on Friday.
“The potential elimination of the federal tax credit for electric vehicles by the Trump administration — without another form of incentive to replace it — could derail the trajectory of EV sales in the United States,” offered Edmunds analysts.
Trump repeatedly vowed to eliminate what he labeled President Joe Biden’s “EV mandate” as he campaigned for the White House.
While there is no such mandate in federal law, the Inflation Reduction Act passed during President Biden’s term revived the credit for many EV purchases, while also granting low interest loans to manufacturers constructing EV and battery plants.
Trump’s transition team intends to knock out the credit as part of a broader tax-reform measure, according to a Thursday report by Reuters, which cited two sources with direct knowledge of the matter.
The president-elect during his first term attempted to repeal the EV tax credit, which was expanded by President Biden in 2022.
Analysts who track Tesla concurred with Musk’s view that the credit’s demise would only help his company.
“This is a clear negative for the EV industry at first look and would particularly hurt GM, Ford, Stellantis and Rivian,” wrote Wedbush Securities tech analyst Daniel Ives. Conversely, “this will enable Tesla to further fend off competition from Detroit as pricing/scale/scope is an apples-to-oranges when compared to the rest of the auto industry once the EV tax credit disappears.”
Americans looking to buy an electric car should do so sooner rather than later, advised Ivan Drury, Edmunds’ director Insights.
“The federal tax credit combined with slashed prices due to slowed sales momentum has contributed to electric vehicles becoming labeled as some of the best deals on the market in 2024. Now, with production cuts shrinking supply and a fresh wave of demand from those seeking a deal while they still can, it can be all but assured that the price for that EV you’ve been eyeing is going up in the coming months,” Drury stated.
CBS News
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