When people think of gold, they automatically imagine stacks of bullion bars stored in high-security vaults. You may even wonder how much one weighs held in the palm of your hand. Well, the large bars you are thinking of weigh one kilogram each, but you can also buy smaller gold bullion bars that weigh as little as one gram.
Regardless for the weight or size, the power gold has to protect investors from negative declines in the value of other stocks and shares ranks it as the safest of investments and over the long-term is the most likely of commodities to produce a handsome return on your investment.
If you are new to stock market investments you are probably wondering why gold is a great investment right now given all the newspaper reports and analyst predictions offer a negative view on gold prices. Why is the value of gold plummeting?
Gold performs well when currency is weak and vice-versa.
The global economy is slowly recovering from the 2008 banking crisis and currencies are getting stronger – particularly the US dollar that is used as the benchmark against the strength of the global economy. Subsequently traders have more confidence in the market and are prepared to take more risks.
Gold on solid ground
Gold prices began to decline last year after the US Federal Reserve announced its intention to taper its Quantitative Easing program. The nature of Central banks buying government bonds is to help fuel the national economy. That the US Central Bank felt it could reduce its stimulus spending is a good sign the US, and the global economy, is in the stages of recovery.
Recent data indicates the global growth is not recovering as quickly as expected and in recent weeks traders have pulled back on buying equities in favour of gold. Precious metals have subsequently balanced and are holding solid ground around the $1270-$1280 mark.
Production in China is also lower than usual which rattled analysts a little, although this is partly due to the annual break for the Chinese Lunar New Year celebrations. Now the Republic is firing on all fronts again we should expect to see the global economy back on track. This should also help the US job market which has a major influence on the direction of stock market prices.
Good time to buy gold
In December 2013, investment bankers published reports forecasting precious metal prices will decline below US$2000. Although there is little indication that will happen at the time of writing, the is a positive sentiment amongst traders that the global economy will strengthen enough for investors to dip back into equities.
When that happens gold prices will fall closer towards anticipated rates, meaning 2014 is a great time to buy gold for low prices. And precious metals are a solid investment even when prices are tumbling.
Eventually, the world economy will suffer another catastrophe, and speculators are predicting the next crash will be even more devastating than 2008 in which case gold price could more than double in the price that you pay for them in 2014. The debt ceiling cannot hold forever so make sure you protect your financial future and contact coininvest.com today to check out the latest bargains on gold bullion bars.