Precious metal fell for the fourth consecutive day as traders continue to shed their gold load. With improved US growth stats, investors are turning their attention to dollar-funded equities rather than non-yielding bullion.
Gold prices fell below the $1300 stronghold this morning and do not look like they will recover. Analysts sense the yellow metal will continue to head towards the $1000 mark for the foreseeable future.
The fall in price of precious metals is good news for casual investors looking to add gold and silver bullion to their investment portfolios. If gold continues on its current course, the next month or two will be prime time for investors to take advantage of a weak market.
No demand for gold
A lack of demand for physical gold is also causing prices to fall, although that may change once the value is more appealing. The price hike throughout February and early March deterred consumers from buying gold, but that will change now that bargain hunters have the opportunity to buy low.
And what an opportunity this is. With the debt ceiling weighing heavily it is only a matter of time before it collapses. Some analysts have speculated that the credit crash could come as soon as May 2014, although with the US senate extending their fiscal cliff until March 2015, investors may be given a good year to stock up on bullion.
It may even be the case that gold prices flounder for the next couple of years. US economic data is getting stronger each month with only slow growth in the housing market giving rise to concern. However, with an expansion in gross domestic products the property market will pick up soon enough.
The Ukraine saga and a credit scare in China pulled gold prices up earlier in the year and the charts have been uneven ever since. Traders had been showing hesitancy, but now geopolitical events appear to have reached a conclusion investors have reason to sell their gold stocks.
There had been some concerns over whether US and EU imposed sanctions on Russia would cause a problem, but Russian officials are laughing away the restrictions lightly. “So what if I cannot get a visa for the United States. I don’t want to go there anyway!” said one official.
The Russians have reacted in kind to sanctions by imposing their own, although are clearly not taking the matter as seriously as official representing the West. “No vodka for Obama,” appear to be the message.
The latest rumblings are that the West are considering tougher economic sanctions, but there is also the threat that further action may harm the dollar more than it does Russian officials.
All in all, the market is performing how it should in light of an emerging global economy. How long the upturn in the economy lasts is anybody’s guess, but one thing we can be certain about is that the market will crash again. Savvy investors know to be prepared by investing in gold.