A volatile quarter for gold saw the yellow metal finish with further losses by the end of trading yesterday. Gold enjoyed gains of $1.80 following a demand for physical gold in Japan, but was quickly pegged back once Wall Street continued their spending spree in US-backed equities.
More US economic data is primed for release this week and the early signs suggest it will be more good news for the strength of the economy. Market optimism has certainly been fuelled by Janet Yellen’s announcement that interest rates will be increased earlier than expected.
Cash holdings in Japan, Europe and the US rose 0.4%, the largest month on month increase since July 2012. Bond holdings enjoyed an even sharper rise of 36.3 per cent and has subsequently taken the .SPX to new highs.
The over-optimism in the market may be a gamble considering the tensions between the West and the Ukraine are by no means amicable, but given the relationship between investment banks and politics, it seems we can relax and wait to see how low gold will go.
Gold prices dropping
With equity markets pumped, there is less need for investors to weigh their bets against safe havens like gold and silver. Gold prices will subsequently drop because there is less demand, which makes this a prime time for casual investors to look for gold bargains from traders like coininvest.com.
Gold prices dropped more than seven per cent in the first quarter and if US economic data is positive will continue to decline. The report to keep an eye on is the non-farm payroll report due on Friday, considered a stick on which the health of the US economy is measured.
Over optimism in the market will depress inflation and strengthen appreciations on the dollar which will ultimately boost consumer confidence and the economy is back in full throttle. During that time gold prices will continue to fall except for the odd spike in the face of geopolitical adversity.
How much time to buy gold?
With signs the global economy is spluttering into life we can look forward to a more prosperous future, and for precious metal hunters, that means gold, silver and platinum will be available for low prices.
The gold market however is very volatile and it is impossible to predict when prices will go up again. The general rule of thumb is that during times of economic depression, political tensions or a global event that threatens to disrupt the market, gold prices are high. When the world wears rose-tinted shades precious metals are an attractive buy.
Even though gold can suffer heavy falls, it eventually goes on a bull run that offers excellent ROI. And this market window is a golden chance for investors to buy their share of the spoils. When the debt ceiling collapses gold prices will soar and investors may well find they need to turn to their bullion to get them through the depression.
For the latest gold prices visit coininvest.com today, and invest in precious metals to protect your financial future.