What Is Going on with Gold?
The stock markets are pretty volatile these days with huge up-and-down swings happening almost on a daily basis (the past month has produced 5 of the 10 largest drops of the Dow). At the same time, gold, which I follow quite closely, also had some roller coaster rides lately, but the general trend of gold is the same as that of the stock market: down. The bullion has traded around $690 an ounce just a couple of days ago. That’s the low of the year!
So what happened to gold? Has it bottomed out, as this article on Goldprice.org indicated? If you are interested, here’s a free video presentation from INO TV explaining the movement of gold price recently. The analyst in the video also says gold is currently oversold and due for a rebound. A rebound seems to be a sure thing, in short term at least, as it happened following some significant drops before. For the long term, I am still looking at gold as an alternative investment that provides diversification to my portfolio, though I don’t exactly use gold as a hedge against inflation.
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a lot of the volatility/selloff in gold has to do with big funds taking off their hedges because they need to raise cash. typically, gold should theoretically be a great safe haven in a time like this. but, due to the panic, big funds have to sell their investments/trades to raise cash. but, to fully unwind their trade, they need to sell off their gold as well, which is often used as a hedge to various trades. not the whole story obviously, but definitely contributes to it. people just need cash at the moment and need it bad enough to sell off gold.
Don’t worry, gold will rebound. If you’re a long-term investor like me, you know that gold beats fiat currencies every time in the long run. Day to day fluctuations don’t bother me, but I do use them to buy more…
Gold was in Demand when the economy was doing great, much like steel and copper and other metals (Precious or not). Yet, now that developement is slowing worldwide, base metals likt tin and steel are seeing a drop in demand. This can be seen as an economy indicator for Gold decreasing as well.
More and More people are not putting thier money anywhere right now. I think sometime between now and March would be a good time to buy if you wanted to.
I heard you can get an ETF that is gold based which provides more liquidity.
>A rebound seems to be a sure thing, in short term at least, as it happened following some significant drops before.
Sorry, but this is first class example of an opinion with no reasons behind it.
Everyone is taking of variations of deflation, now think or find out about impact of that & a strong dollar on gold.
Amit