Gold Prices are Near a Record High. What is the Expert Opinion on Investing in it?

SEATTLE (Scrap Monster): Experts say there are a few reasons to consider investing in gold in today's market, despite the high price tag, including the following:

Gold still has room to grow

With its recent run-up, it's easy to fall into a "what goes up must come down" mentality, but gold experts say that's not the case with gold — at least not yet. In fact, most believe gold still has plenty of room to grow. 

"Gold doesn't have a hard ceiling," says Brett Elliott, director of content at the American Precious Metals Exchange (APMEX). "The recent move above $3,600, hitting a new all-time high, gives us some evidence that gold isn't done yet and the market is expecting more."

And, should a rate cut occur at the September Federal Reserve meeting, which seems highly likely, it only stands to further gold's growth. Right now, the CME Group's FedWatch tool puts the chance of a 25-point rate cut at 92%. There's a small chance of a 50-point cut, too.

This expected cut, plus rising inflation, can "act as a powder keg for gold," Elliott says.

"If the Federal Reserve begins seriously cutting interest rates, gold becomes relatively more attractive," says Ben Nadelstein, head of content at Monetary Metals. "Earning 4% in gold compared to 3% in dollars could encourage more investors to move their capital into gold. "

And as gold gets more attractive as an investment, prices tend to rise.

"Conditions like exponentially rising debt, persistent inflation risk, and ongoing currency debasement all point toward climbing gold prices," Nadelstein says. 

 Courtesy: www.cbsnews.com