Buffalo, N.Y. (WBEN) - The price of gold has increased to record levels over the last several weeks, with prices being more than $1,000 higher than a year ago in June 2024.
As of Friday, the price of gold per-ounce was worth an astounding $3,433.37. That's even up more than $725 dollars from six months ago to close out the 2024 calendar year.
Advocates of investing in gold call it a "safe haven" asset, arguing the commodity can serve to diversify and balance your investment portfolio, as well as mitigate possible risks down the road. Some also take comfort in buying something tangible that has the potential to increase in value over time.
Scott Hunt from Jack Hunt Gold & Silver in Kenmore says usually when gold prices are rising, it's not a sign of good news.
"Gold is often the canary in the coal mine of financial markets, and this precipitous rise may be a foretelling of more negative financial news to come. Not to be the bearer of bad news, and no one can predict anything for certain, I certainly think some of the recent rise in price is in response to a long overdue correction, to correct itself with the inflation rate over the years. But again, gold is often the canary in the coal mine," said Hunt in an interview with WBEN. "We're in a unique business. Bad news usually translates into good business for us. I always hate saying that, but it's the truth. So I can't predict the future, but again, historically speaking, when we see this with gold, it's usually not a good sign, whether geopolitically, financial markets or both."
With Israel's attack on Iran last week, the saw a precipitous increase in the price of gold. Hunt says it is not uncommon in these circumstances for traditional market avenues to take a hit, while gold responds positively.
"We saw the very first day of the Gulf War in the early '90s, there was a huge jump in the price of gold the first day of that war, then the price backed off the next day. Many believe that there was a backdoor deal between the United States and Saudi Arabia to stabilize gold prices at that time," Hunt explained. "So when I say a 'safe haven' asset, gold is something that it's tangible, they can hold it, and it is often, what I would refer to, as a hedge against geopolitical risk, because, again, it is the one asset that often responds positively when things go haywire."
Does Hunt foresee a change in the price of gold in the near future? If anything, the price should remain on the higher side.
"I cannot predict, that would be wrong for me to predict what actually would happen, but I would think that we're probably not going to see a back off in the gold market anytime soon, but you just never know for sure," Hunt said. "Let's just say tomorrow, Iran and Israel reach some kind of peace accord, something I don't see happening, but if it did happen, I assure you, immediately financial markets would respond positively and gold would respond negatively."
Hunt says it depends what your financial circumstances are whether or not you should invest in gold, or look to sell and get some cash in return.
"If you're looking to finance a project or you're short on money, it's a beautiful time to sell. If you are looking to diversify your investments, I would say it would always be a good time to buy," he said. "We always advocate to our clients that it's best to be diversified. So if we had a customer come in and say, 'I want to mortgage the house and put all my money into gold,' we would tell them, 'Go home, take a deep breath, think long and hard about what you're doing. If after you think about that, you still want to come in and do that, well then it's on you.' We had that happen once. We had a customer come in and say that, and we told him, 'Please go home and think about this for a day, because really, the most prudent investor is one who is diversifying their investments amongst a number of different things. Whether it's stocks, bonds, gold, silver, if you're inclined to do real estate, real estate.' But I would never tell anyone put all your money into one thing. Let's face it, anything in life where you put all your eggs in one basket, usually it doesn't work out well."
Todd Scanlon, president of Scanlon Jewelers, says he would sell gold now, because you never know when gold rates may go back down.
"Just come into my store, I'll give them an offer, and it's going to be a very solid offer," said Scanlon with WBEN. "Either gold keeps on going up or it goes down, but it's certainly super high right now. For instance, I had somebody with a coin that they inherited that their mother bought for $300 that was worth $3,200 now."