Gold (GC=F) futures opened at $4,045.60 per ounce on Tuesday, down 0.7% from Monday’s close of $4,074.50. The price of gold fell below $4,000 in early trading before recovering.
The gold price and stock prices have wavered over the past five days, as the U.S. dollar shows strength. Since Nov. 13, the U.S. dollar index (DXY.NYB) is up almost 0.1%, while gold is down 1.6% and the S&P 500 has fallen 2.3%. Interest rate expectations for December have been a primary driver. Traders are currently pricing in a 46.4% chance for a quarter-point rate reduction, according to CME FedWatch.
Watch: Why the September jobs report is worth paying attention to
Investors may get more clarity on interest rates Thursday, when the U.S. Bureau of Labor Statistics releases the September jobs report — more than a month late. Analysts have predicted job growth of 54,000 to 65,000. This would be an improvement over August’s 22,000 new jobs but a decline from last September’s job increase of 254,000.
Continued high interest rates can stifle gold demand by making interest-bearing assets like cash more attractive.
Learn more: While the job market sputters, seasonal hiring offers a lifeline
The opening price of gold futures on Tuesday was down 0.7% from Monday’s close. Here’s a look at how the opening gold price has changed versus last week, month, and year:
One week ago: -2.3%
One month ago: -7.1%
One year ago: +56.1%
On Nov. 14, gold’s one-year gain was 63.4%.
24/7 gold price tracking: Don’t forget you can monitor the current price of gold on Yahoo Finance 24 hours a day, seven days a week.
Want to learn more about the current top-performing companies in the gold industry? Explore a list of the top-performing companies in the gold industry using the Yahoo Finance Screener. You can create your own screeners with over 150 different screening criteria.
Learn more: Gold vs. crypto: Which should investors own in debasement trade?
Gold has the same high-level risk as any investment: You could lose money. And, as with other investments, a loss on gold can materialize in different ways. Understanding the potential outcomes is the first step to managing your risk when investing in gold.
According to gold experts, would-be gold investors should understand these four risks:
Price
Speculation
Opportunity cost
Fraud
Today, we’ll focus on the first two: price and speculation.
Learn more: How to invest in gold in 4 steps
There is a price risk for investors who buy gold when the metal is nearing record high prices. “Buying high to hope for short-term higher is a tough strategy,” said Darrell Fletcher, managing director, commodities at Bannockburn Capital Markets.
Despite the high prices, there are positive dynamics in play for the precious metal. Fletcher pointed out that gold is recovering from decades of low prices, and it’s an increasingly popular diversification asset for central banks and individual investors.
The right expectations, a long timeline, and an appropriate allocation can limit your pricing risk. “Gold should not be seen as a driver of supercharged returns — it’s there to act primarily as a stabilizer in a diversified portfolio,” explained Alex Tsepaev, chief strategy officer of B2PRIME Group.
If you are interested in learning more about gold’s historical value, Yahoo Finance has been tracking the historical price of gold since 2000.
Thomas Winmill, portfolio manager at Midas Funds, encourages investors to view positions in gold bullion, coins, and ETFs as speculative. Gold is a commodity, and “commodity prices are dependent on macroeconomic, political, industrial, and financial factors that are unpredictable, and in some cases, unknowable.”
Despite its recent performance, gold is an unpredictable asset. Keeping that in mind when making trading decisions could protect you from over-exposure and unrealistic expectations.
Learn more: Thinking of buying gold? Here’s what investors should watch for.
Whether you’re tracking the price of gold since last month or last year, the price-of-gold chart below shows the precious metal’s steady upward climb in value.