The gold market in the coming months
In 2010, CNBC’s Cramer posted a video about reasons why people should buy gold. Those reasons still apply today, and people who want to invest in wealth or diversify their portfolios using gold should act now since its prices are fluctuating around the $1,200 mark. Last year, it seems that some investors were not concerned at all about the financial risks in the global market. People took out their money from gold and transferred them to more risky stock investments. What most people don’t realize is that credit risks, which made gold prices soar in 2008, are far from over. Debts from other countries and fiscal deficits are still very much alive in the US, making gold investment a popular option for people who believe in the precious commodity’s strength against a weak market.
Gold will increase its prices after some time
This month, the price of gold has dropped to around $1,280, frustrating many investors who had witnessed how gold had sustained a price of around $1,300 in previous months. While most gold investors see this as a problem, some believe that it’s an opportunity for investors to pile up on gold investments. Joe Foster, investment leader for Van Eck International Investors Gold Fund, said the lows around the $1,200 mark per ounce of gold are in a bottoming process. According to him, gold’s prices will more likely go up and not down at this point. Gold prices are currently low right now due to recent events that include the appointment of the new chair of the Federal Reserve Board of Governors, the Fed’s announcement of tapering, and the increase of jobs in the US. But once inflation takes place after the economy picks up, gold prices should once again soar to new heights. “Gold’s driven by financial stress,” said Foster. “The source of the stress doesn’t matter. You could have bad levels of inflation or deflation. You could have banking problems or geopolitical problems. Anything that adversely affects the financial system drives gold.”
The demand of gold in China and the Fed’s reduction of its stimulus
Investors who still have gold investments will be glad to know that they have a lot to look forward to in the coming months. According to BullionVault’s blog post titled “Three Gold Price Themes Rolling in 2014,” these are what gold investors should pay close attention to as the year rolls out: Firstly, China has been hoarding gold for a long time and its gold-buying spree continues to this day. Investors who plan to sell physical gold may consider selling them to China, and even move a few of their dollar investments in the country. Also, the Fed has finally reduced its aggressive bond buying stimulus and that could cause gold prices to soar in the future.
Investors may find more gold advice at BullionVault. They may also check the precious yellow commodity’s live price movements on the site, which can help fledgling investors and seasoned industry experts.