Is Now the Right Time For A Gold IRA?

July 14, 2017

Stocks are often considered the sure-fire investment for the long term thanks to their historic record. But few investments have the historic relevance of gold—or a history that goes as far back. That’s why so many investors flock to Gold IRAs in order to ensure that their retirement nest egg is safely accounted for. The only issue: how does an investor know when it’s time for a Gold IRA? Is gold’s current price a good point for jumping in, or does it have further to sink?

Gold’s Price In Its Current Context

To understand whether or not now’s the right time for a Gold IRA, we first have to examine the price of gold. There are typically a few key variables that will affect gold’s price:

  • The strength of the U.S. dollar. Since gold is priced in dollars, a stronger dollar will be able to buy more gold for less—which means lower gold prices, and bad news for gold owners.

  • Federal Reserve policy. Federal Reserve policy directly influences the strength of the U.S. dollar as well as the confidence of investors both home and abroad.

  • Supply and demand. Gold is very valuable partially due to its relative scarcity. It isn’t surprising that you can trade a thousand paper notes and still not achieve an ounce of gold.

Of course, other economic factors which influence the price of everything need to be monitored. But to understand the price of gold, continue to look at those variables as an investor. The more you understand a macro view of the economy, the better.

What Does Gold’s Recent Performance Mean?

Gold had a strong 2016 and all indications were that 2017 was going to be just as bullish for the precious metal. But Federal Reserve policy as of late has seen some tightening, which means a stronger dollar—and cheaper gold. Is this just a dip, and if so, is now the time to invest in a gold IRA? To answer that question, let’s answer a different question altogether…

Does It Matter What Gold Does In A Particular Year?

Finally, let’s talk about the real value of owning gold in an IRA: the fact that gold is a relatively stable commodity with a strong record of holding on to value. You’ll often find personal finance experts telling you not to put money in gold because of its weak long-term returns. But this also represents a fundamental misunderstanding of what an “investment” in gold really is. Some people think of gold as the truest form of money. It’s not there to give you dividends—it’s there so that you can count on it being there tomorrow, even through financial storms, and perhaps especially through financial storms.

A Gold IRA can be part of a strong retirement nest egg, but only if you understand the purpose of gold and precious metals in the first place. They’re there for diversifying your asset classes and ensuring that you have a portion of your wealth you can count on, even during tough economic times. And knowing that, individual ebbs and flows in the price will matter less as you attune yourself to a longer timeline.

How To Choose A Gold IRA Company

There are many companies that provide Gold IRA’s and there are many options to consider such as fees, and how and where the gold is stored. This useful Gold IRA Guide provides both more details about gold IRA’s to consider as well as reviews of ten of the best Gold IRA’s. As with any investment, do your due diligence and find the company that is right for you.

Gold is widespread in low concentrations in all igneous rocks.