Gold prices are skyrocketing, should the common people follow suit?

Since the beginning of the year, gold prices have repeatedly become the focus - this time, not because of its brilliance, but due to its soaring and intimidatingly high prices.

As of now, the international gold price has surpassed 4900 dollars per ounce, and the domestic gold price has also consistently stayed above 1000 yuan per gram. For many people, gold is transforming from a 'precious metal' to a 'metal that is prohibitively expensive.'

In front of the jewelry store in the mall, Aunt Li hesitated for a while but still left empty-handed. 'Last year, I was planning to buy some gold jewelry as a dowry for my daughter, but with these prices, I have to think multiple times before buying even a thin chain.'

Not only ordinary consumers are entangled, but many experienced friends are also discussing: 'Is it considered chasing the price to buy gold now?'

Gold, why has it become a 'hot potato'?

International level: safe-haven sentiment continues to rise

Looking globally, the Russia-Ukraine conflict has lasted nearly four years, the situation in the Middle East remains tense, and trade friction between Europe and America continues... The less stable the world, the more funds favor gold as a traditional safe-haven asset.

Although the Federal Reserve's interest rate hikes have come to a pause, the high-interest rate environment is expected to continue. This phase of 'interest rates peaking but not falling' often supports gold—once interest rates are lowered in the future, non-interest-generating gold will become relatively more attractive.

Domestic perspective: shift in confidence and asset allocation

The current domestic economy is at a critical stage of recovery, with adjustments in the real estate market and significant fluctuations in the stock market causing many families to reassess their asset allocation. When traditional investment channels yield unstable returns, 'hard currency' gold naturally becomes a choice for some.

The fluctuation of the RMB exchange rate will also transmit to domestic gold prices. Since international gold prices are quoted in US dollars, changes in exchange rates will directly affect domestic gold prices.

Is gold still worth buying now?

Physical gold: treat it rationally

If you buy gold jewelry for personal use or as a gift like Aunt Li, just arrange according to your financial situation, without overemphasizing its investment attributes. But if you plan to buy gold bars or coins for investment, caution is indeed needed at the current price level.

Historical experience reminds us that when gold becomes a hot topic in the streets, it is often not an ideal time to buy.

In the long run, gold can indeed play a role in diversifying risks as part of asset allocation, but its proportion should not be too high; it is generally recommended to control it within 5%-10% of household financial assets.

Gold financial products: understand the rules before participating

Paper gold, gold ETFs, gold futures, and other products have lower thresholds and are convenient for trading, but their risk characteristics vary:

Paper gold and gold ETFs are relatively simple to operate, suitable for investors who want to participate in gold trends but do not wish to hold physical gold;

Gold futures, options, and other derivatives have high leverage and volatility; ordinary investors should proceed with caution.

Remember a principle: do not easily touch products you do not understand, even if they seem to offer enticing opportunities.

Besides gold, what are some stable allocation options?

Government bonds: supported by national credit

Government bonds are known as 'golden bonds', with very high security. Especially savings bonds, which usually yield higher than the same period's bank deposits and are easy to purchase with low thresholds, suitable for low-risk preference and stable middle-aged and elderly groups.

Time deposits: classic stable choice

Although the returns are not high, bank deposits are protected by the deposit insurance system, with full repayment up to 500,000 yuan. In the current environment, 'capital preservation' is sometimes more important than 'high returns'.

Money market funds: tools for managing liquid money

Money market funds like Yu'ebao and WeChat Wallet are good for liquidity and have relatively low risks, suitable for placing short-term idle funds, with returns generally slightly higher than bank demand deposits.

Insurance: often overlooked as a 'financial stabilizer'

When it comes to long-term stable asset allocation, insurance is a tool worth paying attention to. Its advantages include:

1. Certainty: once the contract is signed, the coverage and cash value are locked in and not affected by market fluctuations, which is especially valuable in uncertain markets.

2. Leverage: with a smaller premium, you can obtain a higher level of protection, for example, a million medical insurance can cover over a million in medical expenses for just a few hundred yuan a year.

3. Savings function: annuity insurance, increasing lifetime insurance, and other products have long-term savings and appreciation effects, helping to cultivate a habit of continuous saving.

4. Risk transfer: transferring risks of illness, accidents, longevity, etc. to the insurance company to prevent family finances from bearing the pressure of unexpected risks.

Who is insurance suitable for?

Young and middle-aged people bearing family responsibilities: as the economic pillar of the family, they need to prevent risks through insurance.

Ordinary people with little investment experience: hoping for asset preservation and appreciation, but unwilling to get caught in market fluctuations; savings-type insurance is an optional path.

Planning for retirement: pre-retirement groups should supplement social security with commercial pension insurance to ensure a continuous income after retirement.

Individuals with wealth inheritance needs: achieving asset-oriented inheritance and tax planning through insurance.

Returning to the initial question: Can you still buy gold now?

For ordinary people, chasing prices should be rational; for investors, gold can be part of the allocation but should not be heavily weighted.

In uncertain times, sometimes 'not losing money' is more important than 'making quick money'; strengthening protection is more urgent than pursuing returns.

When we marvel at gold prices, we might as well first examine our own 'financial foundation': Is the emergency fund sufficient? Is the basic protection complete? Is retirement planned? Only after these foundations are solid should we consider how to steadily grow wealth.

After all, the real 'gold' is not the bars locked in a safe but a safe, prepared, and composed life.

How would you choose to protect your wealth and life?