2013 was the worst year for gold this century. 2014 does not look much brighter for the yellow metal. However, for savvy investors, the fall of gold prices is a prime opportunity to build on their investment portfolio by adding gold.
You only need to look at the gold charts from the recent past to know that the precious metals market always suffers a down period before prices increase – usually due to financial crisis and the threat of war.
In the last 40 years, gold prices have been heavily influenced by world events. The Cuban Missile Crisis, the oil embargo of the late 1970´s and the attack on the World Trade center all influenced an upturn in gold fortunes.
2008 banking crisis
After the 2008 banking crisis, gold value rocketed from $869.10 per troy ounce to an all-time high of $1928. The cause for the sudden rise could arguably be because the global economy was extremely brittle, but whilst that is true, there was another cause for the boon.
In 2003, the World Gold Council introduced GLD, Exchange-trade fund (ETF) which made gold investment more accessible to the general public. ETF´s got off to a slow start, but during its bull run which began in 2007 when investors began adding them to their pension funds, GLD accounted for $30 million dollars of gold spending a day.
By 2012, SPDR Gold Trust was the second-largest equity holding after Apple, but by this time the precious metals market had already begun its downward trajectory. Of all the different ways to buy gold ETF´s perform the worst. Your best option is gold coins purchased from reputable online merchants.
The precious metals market in general is performing poorly at the moment because currency is getting stronger. The benchmark for currency is the US dollar, so when the US economy is rallying traders ordinarily turn their attention to the equities market.
However, currency is not a reliable form of wealth and investment. The value of money can rapidly depreciate and if analysts are right about the next financial crash, the money you have in the bank may be confiscated by your bank and government.
You only need to refer to the bank bailout of Cyprus. In what is considered by some as draconian measures, an EU law was passed allowing the Cypriot authorities to take money from account holders with deposits of more than €100,000 ((£85,000).
Analysts predict the next economic crisis will be worse than 2008 meaning we could see more banks around the world collapse – and now the bailout precedent has been set in legislation, how many more investors will lose a good percentage of the lives savings?
The only safeguard against losing thousands of euros is to invest your money in commodities, and there is no safer investment than the precious metals market – especially when you consider that gold always does well when currency is poor. To ensure the security of your financial future visit coininvest.com today.