Gold has always commanded a good position in the recent decade in many an investor’s investment portfolio, but presently the supporters of the yellow metal, (especially during the period when it rode the market wave) seem a bit skeptical about how it will perform in future. When problems aplenty plagued the stock market in the past, gold bullion had seemed as a perfect hedge against future uncertainties, looming recession and imminent inflation. The troubles still persist, with the ongoing euro zone crisis, the political unrest in the Middle- East and the money-printing strategies by the Federal Reserve and these compel the U.S economy to face the most fragile of times to render the U.S. dollar utterly helpless against its own devaluation with respect to other major world currencies. In such situations, more often than not, gold has risen up in value and reached new highs every year. But could this scenario continue? Or will there be a deviation in the gold price trend?
Despite the economic slowdown and problems grappling China and Europe, it looks like some sort of semblance is slowly being restored to the economy of America. With the extremely low interest rates that have been offered by the central banks around the globe, stocks have been recovering along with the economy, at least; that is what it appears like, at first glance! The concerning factor that rests as a burden on the U.S. economy is the accumulation of debt. So if there is a turn around to the downside by the stock market, only then will investors return to gold stocks and other gold-related investments with hopes for good returns. If this does not happen, there is every fear that gold may have to contend with being overlooked for the time-being, to say the least.
Some time ago, experts were of the opinion that gold had the capability to return to its earlier high level of $1,600 that it saw in this year, but the current situation does not support its hold up to even the $1,500 level! Technical analysis reveals that the equities market is moving in a direction opposite to that of gold. This will most probably be the prevailing scenario if the world economy maintains its path of improvement and investors likewise would prefer to look elsewhere for better returns on their money. Still, many a prudent investor would choose the safe method of investing in gold, more so, for the intrinsic value that it holds. Then there are others who are more interested in investing in stocks of large cap companies which give dividends as yields and look more alluring than gold.
Unless a major crisis is encountered in the world today, or till such a time when something noteworthy occurs to be considered as bad news, gold can well be staring at a certain slowdown and could slide $1,500 and lower.
The other noble metal, silver, seems to waiting for an opportune moment when it can spike. Presently it sits idle below $30.00 and both its 50- and 200-day moving averages, but traders can still expect that prices of the white metal will spike given a single hint that the recovering economy of the world is suffering or has become sustained. After all, the demand for silver is quite high, owing to the numerous applications that it has in the industries of pharmacy, technology, jewelry-making, etc.
And, if America begins to send signals that its economic recovery is struggling to maintain a firm grip, it may result in the growing of demand for silver and the possibility that its upcoming trade will reclaim a position above $30.00. As technical analysis by experts reveals that the current situation reflects the waning silver prices, the white metal seems to have been rendered immovable in a sideways trading channel from September 2011. With only nine times of reaching new highs through the year, silver has also made fifteen new lows, whereas if the time is shortened to six months, it has only two never-before highs as against nineteen new lows; which does not quite look encouraging at all!
In the years 2011 and 2012, silver managed to bounce back and if history is to be followed, it could repeat its act and leap by more than twenty five percent, beyond $30.00 to the $35.00 level. This could be enhanced further, in case of silver futures investments. As silver trading happens quite briskly, one needs to be very vigilant of the moves in the stock market!
Therefore, it does seem like gold and silver, the two noble metals are in a comatose state as far as the stock market is concerned. Will something happen, to shake them out of their stupor?
Tips On Investing In Gold
Gold is the one currency that’s accepted almost anyplace in the world. It has been widely recognized through history, and it’s the most precious of all precious metals. Gold is one of the safest investments, and the prices and value are rising. Whether you want to collect and sell scrap gold from jewelry for a little extra cash, or you decide to get into heavy investing, here are some tips on investing in gold.
There are three basic gold investment methods: buying scrap gold, buying gold bullion, or investing in gold futures. All have varying degrees of risk, with a different degree of payoff. The easiest method for new, small investors is to go to family and friends, local auctions, estate sales or advertisements and offer a fair price for collections of gold jewelry or scrap gold. This can be resold at a local pawn or jewelry shop for a small profit is you price it right.
The next method is investing in gold bullion. This method of investing in gold is a solid long-term investment with very low risk; even in a bad economy gold prices hold steady over time and gold is recognized in every economic system around the world. You need little experience to begin this type of investing, just good reference material about coins and market value, and the rewards can be substantial once you learn the ropes. You can buy and sell rare or historic coins or buy gold in bars. Gold in bar form is normally 99.5 to 99.99 percent pure, and common markings are Credit Suisse, Metalor, PAMP, and Johnson Matthey, which are the names of the most productive gold refineries. Gold is sold by weight, with coins weighing from 0.10 oz to 1 oz, and gold bars sold in 1 oz., 10 oz. and 100 oz. weights. The next step is to find a reputable dealer who has been in business for a while. Banks, auction houses, local gold wholesalers and online brokerages are good sources. Gold is usually purchased at or just below market value, with a one percent premium attached.
Buying gold futures is a variable investment that depends in part on speculating on the short-term value of the commodity. This can be as high risk as traditional investing, and it isn’t a good option for someone new to the market.
Gold as an Investment – Tips for Gold Investors
If the financial meltdown of 2008 and the difficult years that followed taught us anything, it was that we need to take control of our own destinies when it comes to investments. Trust nobody and nothing, as even the most venerable of financial institutions can collapse under its own weight and that of a thousand investors, if the market is subjected to certain winds of change.It also taught us a lesson that the world leaders and captains of industry from hundreds of years past knew very well – that whoever possesses gold and precious metals holds the most valuable cards. Whether you are a seasoned investor or you are considering entering the gold market for the first time, here are some tips that you would do well to keep in mind.
Gold means gold
There are those who talk about investing in gold but actually mean putting some money into ETFs, assuming they are “as good as gold” in terms of their value, butdo away with the need for physically owning gold bullion or coins. The trouble is, in an extreme scenario, these funds are as vulnerable as any other and you could end up possessing worthless sheets of paper.Most investors agree that if you are going to invest in gold, do it for real. You can purchase 1 oz gold bars here, along with other forms of gold and precious metals.
Stick to your plan
Gold might be quite different from stocks and shares, but it is still an investment. To convert it into profit, you need to follow a logical and coherent plan, just as you do if you are trading the Forex market or dabbling in Bitcoin. Making refinements to your plan is fine, but don’t commit to wholesale changes on the basis of a sudden rise or fall in market condition. Gold is a long-term investment, and like anything else, it sees fluctuations on a day to day basis. Let it ride them out, and assess progress on a weekly or even monthly basis to get a true indication of how your investment is performing.
Protect your investment
Physical gold is a beautiful thing to own and enjoy. It is also imperishable, and can withstand extreme conditions. That doesn’t mean you don’t have to look after it, however. Keep your gold properly stored and secure, and if you are holding it at home, look into any reporting obligations you might have on your home insurance schedule. If in doubt, disclosure is always the safest option.
Diversify
Gold serves as a perfect hedge against market uncertainty. As such, it is important to get the right amount in your investment portfolio. Of course, we all know diversity is the key to risk mitigation, so there is a school of thought that keeping it as low as possible, and even diversifying with other precious metals such as silver and palladium makes sense. At any rate, a holding of 10 to 15 percent of your overall investment portfolio in gold is usually seen as ideal.