It’s been an ugly few weeks for gold bar holders. The yellow metal dropped like a stone after it hit multi-month highs at $1,380 an ounce in mid-March, but the recent downturn is providing us with yet another extraordinary long-term buying opportunity; the best part is, there are serious factors that are likely to prevent gold from falling too much further.
Gold bar buyers are presented with yet another chance****__
The selloff started ahead of the Federal Open Market Committee (FOMC) meeting as investors started running for the exits after Crimea’s peaceful annexation, since fears of a military conflict seemed to quieten down. Chairwoman Janet Yellen announced the US central bank would further cut quantitative easing efforts, and so long as there was no official sign of inflation in the US economy, the market found no reason to keep gold near $1,400 per ounce.
But how deep would the correction be? Prices dropped well below the $1,300 per ounce mark and almost $100, a point where the short term upward trend could be challenged. Fortunately the market made an impressive U-turn last week, in fact gold spot price gained $20 closing on Friday, and this week promises to be very exciting.
Gold bar prices cannot drop much further****__
Gold can only drop so far before it starts pushing into gold producer’s average all-in sustaining cost which is running around $1,100-$1,200 an ounce for the global gold mining industry. But when prices dropped close to manufacturer’s break-even point twice in 2013, buyers stepped in to push the metal higher showing that gold has very solid technical support at the $1,200 an ounce area.
This time, support is growing strong at $1,265-1,280 per ounce, and for long term investors this news is of great importance as it brings a sense of security to the market.
Gold’s biggest catalyst may still be unfolding in Ukraine, and information coming from the world media makes it imperative to separate the wheat from the chaff as to what exactly takes place in the region.
Although Russia annexed the Crimean peninsula of Ukraine, at least 40,000 Russian troops still remain on the Eastern Ukraine border. Obviously, this is not a good sign as a Russian incursion into the Ukraine mainland will certainly be met with a military response from NATO allied forces. Both US President Obama and President Putin have pledged to undertake serious diplomatic efforts towards a peaceful resolution, and hopefully that will be the case; still we are all aware of the fact that the yellow metal is the go-to asset in times of geopolitical crisis.
The US have also offered to help Europe towards the announced “energy independence” effort, providing their know-how for shale gas production (natural gas that is found trapped within shale) and Germany’s solar and wind energy 10-year projects, although it is difficult to see how efficiency can be achieved anytime soon through these sources.
Gold bullion buying opportunities are more than obvious at these levels and coininvest.com is the company that can help you make the most of the circumstances.