Emails have been coming into the office today from people who are considering purchasing gold now that it is at a 4 1/2 month low. Also, the Twitter world if full of speculation as to what is next for the precious metals markets.
Investing in gold has always been one of the prudent choices amongst investors. Traditionally, gold has been on a steady rise, but global concerns in Europe have made gold tumble to a four-month low. The year started off with gold consistently rising and seeing prices hit a yearly high of around $1,800 per ounce. The current market price has dropped by 13% since its high and prices are now hovering around $1,560 per ounce. This may make some investors worried of the gold market’s current state and some very eager to buy in.
Benefits
Historical data from Kitco.com shows that gold has been on a steady rise since December of 2000. However, the price of gold was sporadic in 2008 when prices went from to $1,002.50 on March 14, 2020 to $723.70 on October 31, 2020. This was over a 25% drop in a short time, but the market rose to today’s low of $1,560. This means, those who bought into gold a few years ago have almost doubled their money. This can benefit those who have the little extra money to risk on gold because history shows that it generally rises eventually. So why the sudden dip in gold prices?
Fears
Although historical data is in favor of buying gold, there is always a chance that things will change. Currently, the stock market has seen substantial gains throughout the year and those who invested in stocks are doing much better than gold buyers. The fear of losing money in the gold market can be offset by purchasing stocks. However, the European concerns can also cause a drop in stocks as their debt rises.
The market, at the current time is fluctuating drastically. Gold prices have risen fast over the first four months of the year and now yet seem to be declining at an even higher rate. This might be the result of stocks rising and more investors returning to them, providing a decline in gold prices. The fears and concerns among gold investors is warranted and time will only tell if their investments will surge back like they have in the past. Are you bullish or bearish about Gold after today’s news?
