The Bottom Line Up Front

Funding a precious metals IRA may be a smart financial move these days. Because lower gold prices mean you can buy more gold now, and with some market analysts thinking the U.S. is headed for recession, now may be the smartest time to transfer a portion of your retirement savings into precious metals. By investing in an asset proven to weather financial storms, you’re protecting your financial future.

Introduction

Gold prices have been dropping steadily for the past few months, and some investors are panicking. However, this could actually be a great opportunity to roll over your retirement savings into a precious metals IRA. Here’s why: when gold prices go down, it becomes more affordable for folks to buy gold. So, when the price of gold rebounds in the future, your investment will be worth more than if you had invested when gold prices were high. In short, you’re getting more bang (gold) for your buck.

So, what factors should you consider when looking at gold prices? Understanding why they rise and fall and how they fit into the larger economic picture will help you choose the right investments that will serve you well into your retirement.

What causes gold prices to fluctuate?

But weren’t gold prices riding high not too long ago? Yep. The price per ounce peaked at about $2,060 per ounce in March 2022. As of November 2022, the price of gold is around $1,780 per ounce. So, why is gold less expensive these days?

Here are a few facts to consider. Remember that the supply of gold is generally fixed and stable, so it’s the demand for gold that really determines its price. Investors show a stronger demand for gold as a hedge when inflation is high, when the U.S. dollar is weak, or when other investments aren’t performing well. Investors don’t buy gold in the hopes it will appreciate like equities or other investments that pay interest. Rather, they buy gold hoping to protect the value of what they’ve already invested from decreasing in value relative to other investments.

Because of a strong dollar and stock market, gold has slumped — even though inflation in the U.S. has soared. Investors seem to believe that due to the Federal Reserve’s interest rate hikes and despite its prolific money printing, holding gold isn’t the best strategy for now. Better returns are to be had elsewhere.

What’s on the Economic Horizon?

Some analysts believe an economic slump is in our near future. The signs they point to include:

• The stock market is long overdue for a correction. The Dow Jones Industrial Average and other indices have been on a tear since Donald Trump was elected president in November 2016. In the past, when the stock market has gotten this frothy, it’s often ended badly. Just ask anyone who lived through the Dot-Com Bubble or the 2008 Financial Crisis.
• The bond market is also sending out warning signals. The yield curve, which measures the difference between short-term and long-term interest rates, is flattening. This often happens before a recession because investors are anticipating lower economic growth in the future and demand less compensation for lending money for a longer period of time.
• Inflation is rising. The Consumer Price Index, which tracks the prices of a basket of goods and services that Americans purchase on a regular basis, has increased by more than 7 percent over the past year. This is the highest inflation has been since 2019.

Now Is a Good Time to Invest in Gold

So, if you’re worried about an economic downturn and are looking for a way to defend your retirement savings, now may be a great time to roll over your 401(k) or transfer your IRA into a precious metals IRA.

Check out our gold IRA company reviews for the most reputable, trustworthy gold IRA companies that specialize in helping people invest in gold and other precious metals. They just might help you keep your hard-earned savings in the coming years.