In CNBC’s article “Gold could end up being the best investment of 2024,” Jesse Pound quotes John Davi, CEO and CIO at Astoria Portfolio Advisors, saying, “It passed a significant challenge in a high interest rate environment. Now you know the interest rate environment is going to decline. The economy’s weakening. So now, this is when gold actually does start to work,” Amid recent market ups and downs and growing economic worries, gold is becoming a popular choice for safety. With the stock market struggling and lagging behind gold and bonds, investors are turning to the yellow metal. Although gold usually faces challenges when the Federal Reserve’s interest rates are above 5%—a situation that typically pressures assets like gold—its recent performance has been unexpectedly strong. This suggests that gold could do even better if interest rates drop and the economy slows further.
Gold’s current strength, despite high interest rates, shows its rising appeal as market conditions change. John notes that gold has managed well in the high-rate environment and is likely to benefit as rates are expected to decrease. With the economy slowing, gold’s role as a protection against economic uncertainty is likely to grow, possibly making it more attractive compared to assets like Bitcoin.
While Bitcoin outperformed gold in 2024, it dropped about 14% in August, compared to gold’s smaller 2% decline. This difference highlights Bitcoin’s vulnerability to market stress, while gold remains stable during economic turbulence. As the economic outlook worsens, gold might outperform Bitcoin and become the top major asset of the year. Investors are increasingly choosing gold through options like the SPDR Gold MiniShares Trust and the Abrdn Physical Precious Metals Basket Shares ETF, showing a shift toward more stable investments.
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