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The price of gold has been on an upward trajectory over the last several months and has increased significantly over the last few weeks in particular. After starting 2023 near $1,800 per ounce, the precious metal is now sitting above $2,300 an ounce, hitting new record highs along the way.
There are a few key reasons behind gold’s powerful rally. One major factor is resurgent inflation. While the inflation rate is down significantly compared to its recent peak of 9.1%, the newest inflation report showed that the inflation rate ticked back up again in March, climbing to 3.5% — up from 3.2% in February. And, while rate cuts were expected in mid-2024, the Federal Reserve has since signaled it may need to keep rates higher for longer to get inflation fully under control. But elevated interest rates tend to undermine economic growth, which increases the appeal of safe-haven assets like gold.
In turn, investors have been flocking to gold as a hedge against these systemic risks and broader economic uncertainty. This increased demand has helped further buoy gold prices. But while the current gold price rally creates an appealing entry point for all types of investors, from big institutional money managers to retail buyers, there are a few compelling reasons why beginner investors in particular may want to add 1-ounce gold bars to their portfolios this May.
Find out how the right gold investment could benefit your portfolio.
6 reasons for beginners to buy 1-ounce gold bars this May
If you’re a new investor, here’s why you may want to consider adding this type of gold to your portfolio now:
Gold bars can be insurance against economic uncertainties
With an assortment of economic challenges and uncertainties on the horizon, from persistently high inflation and rising interest rates to escalating geopolitical tensions and high debt levels, this could be a smart time for beginner investors to start establishing a gold position. After all, these versatile 1-ounce bars can act as a safe haven and hedge against heightened uncertainty. So, for beginners who need assets that can act as insurance for their investment portfolios, this May could be an opportune time to buy in.
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1-ounce gold bars are a cost-effective option
For investors just starting out with smaller amounts of capital, 1-ounce gold bars offer one of the most cost-effective ways to gain exposure to physical bullion. With 1-ounce gold bars, the premium over the actual metal value tends to be lower per ounce compared to smaller fractional coins or rounds. This allows new investors to maximize the amount of actual gold their money can buy and avoid overpaying relative to the global market price.
This type of gold bullion is highly liquid
Unlike some other types of physical gold bullion, 1-ounce gold bars are among the most liquid and widely traded forms of physical gold bullion products. With their standard weights and dimensions, they are readily accepted by major gold dealers, coin shops, pawn brokers and some retailers around the world. This deep liquidity provides reassurance that the bars can easily be sold or exchanged for cash in the future if needed.
They’re easy to store and divisible for spending
While carrying significant value in a small package, 1-ounce gold bars are still compact enough to store securely at home with modest security precautions. At the same time, their 1-ounce weight provides significant divisibility compared to larger bars or coins if a beginner investor ever needed to exchange a portion for goods or services in an emergency scenario.
It’s less complex than other gold investing options
Beyond their liquidity, 1-ounce gold bars are known for their simplicity and recognizability. With no numismatic premium and hallmarks from major private or sovereign mints, these bars essentially contain their entire value in their pure gold content. This recognizability as a global gold standard reduces complexity for beginners starting to build a precious metals portfolio.
Gold bars offer unique flexibility
By opting for 1-ounce bars, investors can more easily purchase smaller amounts over time rather than being forced to invest a large lump sum. This provides the flexibility to take advantage of dollar cost averaging — spreading out gold purchases at regular intervals to reduce risk and smooth out volatility.
The bottom line
With gold forging higher and investor interest surging, this May presents an attractive entry point for beginner investors looking to establish or add to their exposure through highly liquid, divisible and recognizable 1-ounce gold bars. That said, investors should do their homework and not overextend themselves if buying in. But when used prudently, these small gold bars could make for a useful addition to a new investor’s portfolio during this opportune window amid gold’s powerful run higher.