Economic data suggests the times ahead are about to improve financially and investors can look forward to the future again. Currency is getting stronger and is pushing gold prices down – and some analysts are predicting gold prices will continue to head towards the $1000 per troy ounce.
This is not good news for anybody wanting to sell gold, but presents an excellent opportunity for investors to take advantage of low gold prices and pep up your investment portfolio.
Gold has been used as a safeguard against risky investment for decades, but captured the public interest in 2003 when the professional middle-classes started ditching their equity shares in favour of precious metals. Prices rose from $350 per troy ounce in 2003 to an all-time peak of $1921 per troy ounce in September 2011.
The reason for buying gold is because it is a long-term investment and with the emergence of online merchants the global gold market meant gold was in high demand. Then came the housing collapse and resulting banking crisis which gave gold prices a meteoric rise.
Recent economic data is a strong indication that the global economy is gathering pace again and as currency gets stronger there is less need for investment banks to buy gold, thus driving down the prices.
Gold prices had a good start to 2014 as demand for physical gold kept prices stable with a 0.3% increase, but it is unlikely to keep up the momentum. Both the US Mint and the Royal Mint in the UK have reported sell-outs so if you are thinking of investing in gold coins, you should act fast. Visit coininvest.com for the latest prices.
The potential collapse of gold prices does not mean it is not a good investment. On the contrary, gold always rallies at some point, especially during an economic depression. History sights that financial strife comes in cycles – and everything is global these days.
Cash in on low gold prices
The global economy is by no means secure. The banking system runs on a cycle of perpetual debt so that essentially, just about every tax payer is living on credit. At the moment the economy is being propped up by electronic money generated by government stimulus. How long will the debt ceiling hold. The weight of the US $17 trillion debt bill has already started to show signs of cracks.
When assessing the economic data, it makes good financial sense to invest in the security of your future by inverting in precious metals. Another banking collapse is inevitable and when the debt ceiling finally caves in the global economy will be in such as mess it will make the 2008 setback look like an ink blot on the balance sheet.
As economies get stronger around the world, you should expect to see a very volatile precious metals market for the next year at least, and possibly for quite some time after that. However, that gives long-term investors plenty of opportunity to cash in on low gold prices and wait for the bull to run.