Gold Price Plummets – Is this a Cause for Concern?
As the price of gold keeps dropping,, many investors are shying away from this precious metal. During the past several months, it has been in a steady decline, dropping from $1,379.00 on March 19th and is hovering around $1,240-$1,247 per ounce at the beginning of June. The prices changed slightly from $1,241.88 on June 2nd to $1,247.80 on June 4th and were still within this range on June 5th. While this type of volatility allows savvy short-term traders to make a decent amount of money, it may be a cause for concern for those looking at gold as a stable and relatively safe investment in the long run. Of course, the ultimate decision on whether to invest in gold is affected by a number of factors and it isn’t as simple as looking at charts a few months back.
Gold has shown a strong upward trend in recent history
It is easy to get sidetracked by recent reports of gold prices plummeting, but we should take a step back and look at the bigger picture. Gold has been around for a millennia, and is still highly prized for its’ traditional use in jewelry and as a safe investment, however the demand for gold in the modern world is fairly high due to its numerous industrial uses. If we look at the price of gold in the last 40 years, we can notice a big upward trend, despite the sporadic fluctuations in price on an annual level. Even these supposedly low prices that have got everyone panicking are more than double the prices just 10 years back. Although, there has been some turbulence and a noticeable drop in the past couple of years, past experience shows that prices tend to skyrocket just as quickly. So, those investing in the long term, who can afford to wait out the storm for two or three years, this drop in price doesn’t present a significant problem. On the other hand, a low price gives you plenty of investment opportunities.
Buying gold while the price is low
Buying low and selling high is an old adage, and gold has a tendency of bouncing right back up after dropping to record lows. As stated previously, this provides some great opportunities for day traders or those who focus on short-term fluctuations – although silver tends to be more volatile and lends itself well to this trading strategy – but the current climate can also be beneficial for those looking to get into gold as a long-term investment. Gold will appreciate over time, much more than your money would in a bank account, and although there is a risk involved – you may need to sell in an emergency during a major price drop – it is still a great way to secure your wealth for long periods of time. We are talking decades here, with some fluctuations here and there, but an overall positive trend.
Gold may be plummeting currently, but despite all the fear-mongering, history has shown it to be a good way to secure your wealth, and the ups and downs don’t necessarily mean much in the grand scheme of things.