All that glitters may be gold again for investors. The economic uncertainty that's roiling Wall Street has the precious metals market hot again. Gold and silver have outpaced the market for the last six months, and some analysts are predicting record highs for both before the end of this year. Gold has risen modestly since the first of the year, now sitting around $2,000 an ounce. Silver is up more than seven percent in the past month alone.
It's no big secret why gold and silver are doing better than the stock market. "The reason there's all this talk about gold now is whenever there's turmoil at the Fed and there's turmoil in banking, gold does well," says Richard Rosso, Houston-based financial planner. "If you believe that we're going into a recession, if economic growth slows down, and this banking crisis is the beginning of something bigger, then gold is going to be a safe haven."
While investing in precious metals is a common and reasonable alternative to the markets, Rosso cautions it's best done in small doses. "I'm going to have maybe five to ten percent of my portfolio in precious metals," he tells KTRH. "You have to understand there are going to be many, many years where metals underperform, and years where they overperform."
So far, 2023 looks like an 'overperform' year for metals. But as with all investing, individual results may vary. "Investing in gold or silver is fine, but don't get overboard with it," says Rosso. "Work with your financial partner or advisor to help you understand how much to own, and how to own it. That's important."