Between 2008 and 2011, gold prices soared by 170%. Cash for gold merchants were popping up l love the place and the largest companies were taking in more than 10 tonnes of scrap gold a year and melting it into bullion. In 2013, selling scrap jewellery began to slow down and many of the gold merchants have disappeared off the streets.
But it´s not just the start-up little leaguers that are going out of business, the big game players are struggling as well. Albemarle and Bond, the UK´s most successful pawnbroker has had to melt its own gold just to stay in business. So what is happening to Britain´s gold trade?
Improving global economy
The biggest cause of gold decline is because the global economy is starting to recover therefore traders do not feel the need to back gold as a hedge against riskier investments, therefore the demands is not as high and prices go down.
The improving job market and strengthening of the US dollar prompted the US Federal Reserve to announce plans to trim its money printing stimulus. That was in June 2013, and ever since gold and silver spot prices have gone into steady decline.
Economic data published in the States last week showed that the early optimism was premature and that the US economy is not as strong as first thought. That data caused a panic on the trade floors and gold enjoyed something of a mini revival for three days.
2014 Gold charts
Towards the back end of 2013, investment analysts were optimistic of economic growth and forecast gold prices to slide further down the charts. Some analysts are even predicting that gold prices could close in on the $1000 mark per troy ounce. If it does, investors in gold can make some serious profit.
Gold prices may not be expected to rise in 2014, but they will enter a bull market again, and with prices expected to drop below $1200 an ounce over the next few months, this is a great year for investors to add gold to their portfolio.
Gold is a long-term investment and performs best when currencies are weak – most notable during times of economic crisis. It is inevitable that the stock markets will crash again and the next hit could be even more devastating than the 2008 banking crisis.
Should that be the case, investors in gold should expect to see prices rise quite significantly. It is not even unthinkable that gold prices will break the $2000 barrier and could even double by the time prices have bottomed out in this bear market.
Gold and silver have always been solid safeguard investments and in times of economic depression perform admirably. During the oil embargo in the 1970´s gold was turning profits of $800 an ounce and the decade of world instability between 2001 and 2011 also enjoyed a surge.
Investing in gold to protect your financial future is a wise decision so check out the latest prices for gold bullion at coininvestdirect.com today.