By Austin DeNoce, Benzinga

So far in 2024, the financial markets have experienced a healthy dose of turbulence, leaving many investors questioning where to safely allocate their capital. On August 5, the CBOE Volatility Index (VIX), often referred to as Wall Street's “fear gauge,” saw its largest single-day surge in history, largely due to a massive leverage unwind of the yen carry trade and escalating investor fears over a potential U.S. recession.

The VIX spiked to a high of 65.73, a level not seen since the market turmoil of March 2020. Understandably, this surge shook investor confidence, particularly as it coincided with continued softening in the labor market and sharp declines in major indices like the Dow, S&P 500 and Nasdaq. As economic uncertainty continues to loom, many are reassessing their portfolios and seeking assets that can provide security. In this context, gold has emerged as a potentially compelling choice, offering some refuge from the volatility that has rattled traditional equity markets.

Gold has historically been regarded as a “safe-haven” asset, and its appeal has only grown in the face of 2024’s market volatility. Unlike stocks and bonds, gold is not directly tied to the performance of a specific company or government, making it less vulnerable to economic downturns. In 2024, the stability of gold has proven itself in spades when compared to the performance of popular exchange-traded funds (ETFs) like the SPDR S&P 500 ETF (SPY), Invesco QQQ Trust (QQQ) and iShares Russell 2000 ETF (IWM).

For example, during a particularly volatile period between July and August 2024, the SPY fell 10% while QQQ saw an even more dramatic 16% drop. In contrast, gold's steepest decline in 2024 was a relatively modest 6.4% between May and June. This resilience highlights gold’s ability to preserve value even when traditional markets are in turmoil. As a result, gold may serve as an effective portfolio diversifier, helping to reduce overall portfolio volatility and help protect against significant losses during market drawdowns.

Gold’s performance in 2024 has been nothing short of exceptional. On August 21, gold prices reached a fresh record high, closing above $2,500 per ounce. This surge has been driven by multiple factors, including ongoing concerns about inflation, deficit spending and a weakening U.S. dollar. Additionally, the anticipation of the Federal Reserve’s long-awaited cutting cycle – signaled by Chairman Jerome Powell’s dovish Jackson Hole remarks – has also helped fuel the rally in gold prices. Lower real interest rates typically boost the price of gold as it becomes more attractive relative to interest-bearing assets.

Meanwhile, central banks have also played a significant role in driving demand for gold, with purchases surpassing typical levels due to global economic uncertainties. Geopolitical tensions, particularly conflicts in Ukraine and Gaza, have only added to the allure of gold as a store of value, making it an essential component of a diversified investment portfolio in 2024.

For those considering an investment in gold, selecting a reputable dealer is the first and arguably most important step. Preserve Gold is a North American precious metals firm that offers personalized guidance backed by industry experience with the goal of making precious metals accessible to a wider audience.

Preserve Gold emphasizes transparency and reports receiving lots of positive feedback from clients. The company provides services such as secure shipping, buyback options and price assurance to help investors maximize the value of their investments.

Preserve Gold offers various options for purchasing gold and silver, including the ability to open a Precious Metals IRA and to deliver directly to your home. The company’s executive team has over 30 years of combined experience in the precious metals industry, with a team of Precious Metals Specialists dedicated to assisting clients.

In the face of market volatility and economic uncertainty, gold continues to prove its worth as a historically stable and valuable asset. With prices pushing to new all-time highs and the potential for further gains well into 2025, gold potentially remains a strong bet for investors seeking to help protect their wealth.

Get your hands on Gold through an IRA with the help of Preserve Gold!

Featured photo by Zlaťáky.cz on Unsplash.

Benzinga is a leading financial media and data provider, known for delivering accurate, timely, and actionable financial information to empower investors and traders.

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