Great Time To Buy Gold: Analysts Predict Further Price Drops This Week

Great Time To Buy Gold: Analysts Predict Further Price Drops This Week

Stock market analysts taking part in the Kitco News Gold Survey (KNGS) anticipate further price drops on gold and silver bullion this week.

Precious metals fell at a steady rate last week and were down to $1750 an ounce on Wednesday until the Federal Reserve announced a slack in the US job market.

The news led to more hawkish sounds from the Open Federal Market Committee (OFMC) as to whether they would raise interest rates earlier than expected. If they do, it would have a negative effect on gold and prices will come down.

However, reports suggest there are some members of the FOMC who are concerned about prolonging low interest rates longer than necessary. These comments have led some speculators some assume the Fed are attempting to bluff investors.

Of the 37 participants that responded to the KNGS for this week’s forecast, 23 expect prices to soften. Only eight envisage a rise whilst three expect little change.

Price drops expected in September

Analysts have also predicted September will be a bad month for gold as well. Market trends in recent years suggest rates will tumble in the coming month – meaning this is a great time for investors to add gold to their portfolio.

Despite slightly disappointing news in the job market last week, the overall outlook of the US economy is getting stronger which is benefiting the dollar. The greenback rallied beyond 82 on the technical charts last week.

When currency performs well – particularly the US dollar – gold prices come down. This gives consumers and casual investors a great opportunity to invest for reasonable price – especially when you consider the potential value of gold when the price goes up.

And gold prices are destined to rise dramatically.

Precious metals perform best during times of economic turmoil and in times of war. The Ukraine crisis has already played its part in supporting gold this year and the stand-off with Russia could get worse.

Over the weekend, Ukraine ministers accused Russia of covertly sending troops into eastern Ukraine with an aid convey. The claims have outraged western leaders and further action could be taken against the Kremlin.

If the action is military expect gold prices to go up!

Collapse of the economy

But war is a political game to spook the markets and keep everyone in fear. The biggest threat to the economy – and thus the price of gold – is the impending economic collapse.

History shows that every 15 to 20 years the economy goes into recession. The 2008 banking crisis hit businesses and families hard. New laws were introduced in Europe which allowed banks to take money from their account holders in order to continue operations.

With every major central bank around the globe clocking up trillions in debt, there is no way the current financial system can continue. When the US dollar collapses the entire banking system comes down with it – and you can kiss goodbye to everything you have in the bank.

The only option you have of protecting your financial future is to buy precious metals.