Could this be a golden opportunity to buy now?
Could This Be a Golden Opportunity?
After the recent decrease in gold value, people must be wondering what is going on and what kind of impact this may have on the economy. Could this be a sign that now is the right time to buy gold, or the exact opposite - that any gold that we have in our possession is getting cheaper with each passing day? According to the central bank, this reduction in gold prices can be attributed to the fact that there was too much gold in the bank vaults, which did not generate any income and, at the same time, the cost for storing the gold had to be paid. Since gold was only draining the profits, it was perceived as hindrance, so, essentially, it needed to be sold, in order to start making money. An ounce of gold can now be purchased for a price that is below 1300 American dollars, currently between 1240 and 1250 dollars. However, the question is, if the price of gold has dropped so low and is still going down, then why are the Chinese so interested in buying it, in such large quantities. Could they be taking a gamble with such a move, or is this an action that was strategically thought through? The one thing that all the gold price charts point out is that, over the years, both gold and silver ahve never had a stable price - quite the contrary - prices have constantly gone up and down. This is partly because both of these materials are constantly used in manufacturing, in addition to their value as an investment tool.
If you are planning to buy gold in Australia, you must take into account the conversion rate, since the price of gold is in American dollars. The strength or weakness of the AUD will determine the real cost in Australian currency. Although you may feel like you are paying more than you need to, be aware that the limitations of supply of physical metal dictate that it will only get more difficult to procure. Asia has no reservations about acquiring it, so make sure you secure yours while you can. Ecuadorians intend to transfer more than half of their gold supplies to Goldman Sachs, with an intention to receive only 3,5% of the money on interest. Although this is a good and efficient way to solve the gold storage problem, there is little to no doubt that this gold will be in China’s possession in the end. To put it bluntly, making easy profit by purchasing gold, in a short time frame, is now improbable, but not buying gold now will only make it harder for you to obtain it in the future.
To conclude, the decrease in gold value causes it to be oversold and will probably create a huge demand for it in the future. Buying gold now, while it is still easy to obtain, will ensure your supply once the true demand for it emerges. Before you proceed, make sure you do your own research, consult your financial advisor if you need to.