All you need to do is look at the historic charts for gold prices to see that the price trend does not go in a straight line. It also does not go straight up or straight down, there are peaks and valleys in the price trend for any investment, and gold is no exception.
Gold has been in a down trend since early this year. In fact, looking at the price charts for different time periods can be quite enlightening. The twenty year chart for gold prices shows a low of $250 per troy ounce back in 1993. The 5 year low was about $750 per troy ounce in 2007 and anyone who has followed gold prices know that even though prices backed off early this year, we have now resumed an uptrend following the recent dismal jobs report.
The purchase of gold as an insurance policy against financial crisis and the popularity of gold accumulation among emerging economic powers such as India and China are primary factors that continue to push gold prices higher. The uptrend in the price of gold after the recent grim jobs report is an indication that economic pain is far from over and although the US economy is showing signs of life, Europe is facing serious hardships, India is dealing with inflationary pressures and China’s growth picture is softening.
The trick to making money in any investment is simply stated as “buy low, sell high” and anyone who has done any investing knows how difficult that is to achieve. When you take a look at the 1 year chart for gold prices you can see that we are just coming out of a valley and are now in an uptrend or a bounce. Anyone who has invested in stocks or gold knows how impossible it is to call the bottom or the top, but buying on the bounce is a good way to get in on the beginning of an uptrend.
Whether you are purchasing gold as a way to increase your wealth or as an insurance policy against future financial crisis the current environment presents an attractive buying opportunity.
When you are considering investing in gold, be sure to work with a reputable gold dealer and be alert to the current spot price of gold. When you purchase gold, whether you purchase bullion or other types of gold investments you will pay more than the spot price to cover production, processing and overhead. The premium you pay should be reasonable and in line with the current spot price.