The gold price has risen very consistantly in the past 10 years; and anyone who has placed an investment in it 10 years ago will be reaping over a 400% return now. Is now a still a good time to buy gold coins?
Rising gold prices
Gold is now being traded at a record high but can its price be sustained or go further? Many are wondering about this as they watch the momentum driving gold prices higher. But no one can predict the future and no one knows for sure when the gold ‘bubble’ will burst or when it will start for that matter.
The current gold price rise is quite deceptive as it rose from a depressed low of $250 per ounce in 1999; gold prices were at a record low after the huge concern of Y2K. Now it is rising close to $1,400 per ounce. Hence, gold prices are merely recovering in the view of long-term price averaging.
Bubbles
There were other bubbles before: the 1990s tech mania and the 2005/6 housing bubble. In comparison, today’s gold ‘bubble’ is projecting close to the same trajectories; the gold bubble looks as though it is no where close to bursting.
One may be making good money from gold assets today but the real smart money lies in waiting just before the bubble bursts to sell and maximize profits, although that may be a higher risk as no one knows the exact moment.
Another reason to think that the gold bubble will not be bursting soon is that the futures market trend which shows more rise in gold in the coming years albeit a small percent. But this amount is seen as lower than municipal bonds; hence, the conclusion that the gold bubble will not burst as yet.
The industry is far from bullish which is in contrast to the expected bursting of a bubble. Most gold analysts such as Barrick Gold, Randgold Resources and Newmont Mining do not view gold as having reached its peak as yet.
Currency Devalued
With the flooding of liquidity by world central banks, currencies are quickly devalued. Gold holds the only spot of stability with many supporters and followers. There is no cash flow generated from gold as its gains are only realized upon sale.
With the lost of global confidence in the U.S. greenback, central banks are using gold as their financial reserves instead, making them the world’s net gold purchasers since 1988. With the increased U.S. dollar supply, the U.S. gold reserves are just a mere 15% equivalent on the U.S. dollar, which is a new low.
Rising gold prices
Gold is now being traded at a record high but can its price be sustained or go further? Many are wondering about this as they watch the momentum driving gold prices higher. But no one can predict the future and no one knows for sure when the gold ‘bubble’ will burst or when it will start for that matter.
The current gold price rise is quite deceptive as it rose from a depressed low of $250 per ounce in 1999; gold prices were at a record low after the huge concern of Y2K. Now it is rising close to $1,400 per ounce. Hence, gold prices are merely recovering in the view of long-term price averaging.
Bubbles
There were other bubbles before: the 1990s tech mania and the 2005/6 housing bubble. In comparison, today’s gold ‘bubble’ is projecting close to the same trajectories; the gold bubble looks as though it is no where close to bursting.
One may be making good money from gold assets today but the real smart money lies in waiting just before the bubble bursts to sell and maximize profits, although that may be a higher risk as no one knows the exact moment.
Another reason to think that the gold bubble will not be bursting soon is that the futures market trend which shows more rise in gold in the coming years albeit a small percent. But this amount is seen as lower than municipal bonds; hence, the conclusion that the gold bubble will not burst as yet.
The industry is far from bullish which is in contrast to the expected bursting of a bubble. Most gold analysts such as Barrick Gold, Randgold Resources and Newmont Mining do not view gold as having reached its peak as yet.
Currency Devalued
With the flooding of liquidity by world central banks, currencies are quickly devalued. Gold holds the only spot of stability with many supporters and followers. There is no cash flow generated from gold as its gains are only realized upon sale.
With the lost of global confidence in the U.S. greenback, central banks are using gold as their financial reserves instead, making them the world’s net gold purchasers since 1988. With the increased U.S. dollar supply, the U.S. gold reserves are just a mere 15% equivalent on the U.S. dollar, which is a new low.
Great post. I love the informative style you adopted. Clear and easy to understand
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