Portfolio holders obtain physical gold assets for a number of reasons, ranging from reducing the risk of losses from more volatile assets to gold’s ability to serve as a private, tangible form of wealth in today’s increasingly digital world.
“It’s one of the few assets that has not only held value but has also been a medium of exchange that facilitates commerce,” says U.S. Money Reserve President Philip N. Diehl, who served as the 35th Director of the U.S. Mint. “I think of gold as being ‘wealth insurance,’ a form of risk protection in a portfolio — a hedge against hard times. When stocks, bonds, and other assets are falling, gold tends to hold its own or rise in value.”
After learning from a U.S. Money Reserve representative about how gold and silver could help anchor his portfolio against the ups and downs of the stock market, Eric L. decided to purchase precious metals.
“I appreciate [the Account Executive’s] answers to many questions and the helpful information sent to my home and emails,” he says in one of the U.S. Money Reserve reviews shared on the Better Business Bureau website. “A good relationship with [U.S.] Money Reserve netted my first purchase, and [I’m] now considering another.”
Eric isn’t the only portfolio holder to incorporate precious metals into his savings plans. Others have also shown an interest in gold recently for some of the following reasons:
The Overall Demand for Gold Is Strong
Global gold demand rose 3% year-over-year in Q1 2024, making it gold’s most robust quarter in eight years, according to the World Gold Council.
Bar and coin investment also maintained its pace in the first quarter from the last quarter of 2023, also showing a 3% year-over-year increase.
In a statement published in April 2024, Louise Street, the World Gold Council’s senior markets analyst, said that, based on gold’s recent performance, the organization now expects a stronger return for the precious metal in 2024 than previously anticipated.
Central Banks Are Buying Record Amounts of Gold
Central banks have bought record amounts of gold in the past two years. In 2022, they added 1,082 metric tons — 152% more than the year before, the largest increase on record. In 2023, banks purchased 1,037 metric tons, the second-largest amount on record.
A recent survey involving 70 of the world’s banks found that 81% expect reserve managers to continue adding to their gold holdings over the next 12 months. The managers said gold’s ability to help lessen risk and a need to prepare for potential political and economic uncertainty are mitigating factors.
Specifically, gold’s long-term value was the banks’ top reason for holding gold, with 88% of reserve managers citing that as a catalyst, followed by its performance during a crisis (82%) and gold’s role as an effective portfolio diversifier (76%).
In both 2022 and 2023, central banks’ gold purchasing comprised nearly a quarter of the overall annual gold demand. Further robust central bank purchasing could potentially help drive the overall demand for — and prices of — gold higher.
“Central banks were net sellers of gold until 2010, when the Global Financial Crisis caused an abrupt change in their practices,” says Diehl. “Since January 2010, central banks have added an extraordinary net 7.9 thousand metric tons of gold to their vaults, or 3.6% of all the gold ever mined. This has had an extraordinary impact on prices since the banks have swung from being a significant source of supply to the market to — in recent years — a huge source of demand.
“That means any new gold coming into the marketplace must draw a higher price to generate a return on producing it,” Diehl continues. “That is contributing to a long-term increase in prices and will continue to do so because the easy gold is already out of the ground.”
Gold Prices Keep Breaking Records
The recent series of record gold prices have prompted speculation that gold may skew even higher.
On March 21, 2024, The Wall Street Journal reported that gold rose above $2,200/oz. for the first time.Gold prices again increased the following month, climbing to more than $2,400/oz. on April 12, according to Yahoo Finance. On May 20, as USA Today confirmed, prices reached another record level, $2,450.05/oz., and on July 17, gold reached its current record high of $2,484/oz., according to Kitco.
As CBS News noted in May 2024, gold’s rise is likely based on elements such as stubbornly high inflation and continued geopolitical tensions, neither of which are expected to subside anytime soon. Coupled with gold’s limited availability and historical performance, these factors may be attracting portfolio holders looking for an option that’s not as volatile as some other assets.
Portfolio holder Rich D. says he feels confident about his decision to become a precious metals owner.
“I reviewed three companies when I turned over my savings to gold,” Rich says in one of the U.S. Money Reserve reviews posted on the Better Business Bureau website. “As our country and the world [seem] to be in such turmoil, I knew I had to make a different choice with my savings to protect it. Gold, I found, is the way — and my choice was U.S. Money Reserve.”
Edward S., in another U.S. Money Reserve review on the Better Business Bureau website,
Says he transitioned from a “401(k) that has been losing money” to a gold-backed individual retirement account.
“That is making me more return on my investment,” Edward says. “I feel safe and secure.”
U.S. Money Reserve client Kenneth P. describes the representative from the company he’s worked with as well-informed and very efficient.
“We have prospered under her supervision of our gold and silver selections and have been exceedingly pleased with her guidance,” he states in a U.S. Money Reserve review shared on Google.
Cynthia S. is another client who praises the help she received from the company.
“Dealing with your hard-earned money can be stressful in this economy, but [my Account Executive] made it easy,” Cynthia says in one of the U.S. Money Reserve reviews on the Better Business Bureau website. “I know I made the right decision.”
Additional information about obtaining precious metals — including the benefits incorporating gold into a portfolio can potentially provide — is available on U.S. Money Reserve’s website.
You can also speak to a U.S.-based Account Executive, who can answer any questions you may have about the precious metals market. To talk to one today, call 833-845-1748.
