The value of gold has always been a steady guaranteed investment. Purchasing gold is a valuable endeavor that has always been a good move for your portfolio. However, now may be the time to really consider taking the appropriate measures to buy gold. All of the stars seem to be in alignment and all of the trends that have built up over the years have come together to suggest you should buy now before the gold prices increase steadily.
1. People are Sick of Gold
This means that the short position (measuring the bet against it) is high. People are over buying gold and thinking it is going to get them a great return. The bullish percent index (BPI) is a technical measure that tells you the number of stocks in a group that are in a trend. It recently went to zero and the last time it happened the gold market surged to 36%. There are also high outflows coming from gold funds. So, basically investors are tired of hearing about gold, so it is a great time for you to buy gold.
2. The Dollar is Not Sustainable
Gold and the almighty dollar are always on opposite poles of the financial world. Currently, the dollar is at a high, so gold is at a low. It is predicted that the dollar will plunge soon. This will be done by the Federal Reserve not increasing rates, as predicted, or not increasing to the full quarter of a percentage point. Others think that the European market will grow and gain investors due to the big stimulus programs occurring. This would mean Europe could still have significant investors that will bid up currencies against the dollar. If this occurs, the dollar weakens and that means gold will soar. So buy gold!
Being diversified and having gold as your insurance is a great way to stay safe in the investment world. Gold is expected to rise when U.S. debt levels rise and the confidence in the dollar plunges. Central bank lending and government spending programs around the world could also spark inflation and then the dollar plummets. We have also borrowed so much money that we have no idea what that will do to the economy and the all-mighty dollar. In all of these scenarios, gold wins.
4. Watch Gold Miner Stock
Gold miner stock is a great indicator of when gold may rise or fall and can let you know when to buy or sell. Stock is risky though, so if you are considering purchasing stock remember that it is not as fool proof as gold. Stock can dip and crash at a moment’s notice. However, the gain that can be obtained in gold miner stock can be significant if there is a huge increase in demand and the need for these miners to start opening up gold mining season more strongly.
Due to upcoming holidays in India and China, gold is expected to rise in demand and force the market to rise. The September time frame is historically a great time to buy because it is the beginning of the gold gifting season in India. Because of this tradition, September is the time to buy historically because gold rises in demand. Low gold prices will also spur a need for others to buy gold for investment purposes as well. And it is like a chain reaction because their income rising will also add a higher demand for gold.
When investors buy gold, they are looking to secure their investments and have a little bit of steady insurance. The gold market is not as volatile as other precious metals and it usually doesn’t dip low enough to cause concern for those holding gold in their portfolio. It is tried and true and extremely steady in the race. The question is what percentage of gold should be in your portfolio. The debate is strong, but at least 10% of your portfolio should be padded with gold. If you want to go higher, maybe consider gold miner stock, which has the ability to grow pretty significantly. Follow investment advice and watch the stocks and precious metals rise and fall and hold out for the times when you can significantly make profit. If the rates are not high enough, simply keep the gold as insurance and wait for that one day when you will be happy you held on to it. Simply put, buy gold.