Top 5 reasons to invest in gold and silver
Excellent article.
Top five reasons to invest in gold and silver
When things get tough its good to
try and forget the noise and remember the basic reasons to own gold and
silver. From high demand in Asia to the Federal Reserve raising interest
rates, here are the top five reasons why now is the perfect time to
invest in gold and silver.
1. China and India are buying
According to The Wall Street Journal,
in 2013, demand for gold jewelry, coins, and bullion increased by 32%
in China. This year is no different. In fact, China’s demand just
surpassed India’s, whose gold consumption went up by 13% last year. Paul
Horsnell, head of commodities research at Standard Chartered in London,
gave his opinion on gold demand in China and India. “There is a floor
around $1,100 set by Chinese retail demand,” Horsnell said. “Physical
demand indicators out of China and India are firming.” Look to these
massive markets to continue fueling demand for gold.
2. U.S. coin collectors are buying
Bullion coins are hot. The U.S. Mint
temporarily sold out of Silver Eagles in October after a record-breaking
sales month with 4.14 million coins sold. In the same month last year,
sales were only 3.01 million. Gold Eagle sales were also high, with a
total of 121,500 sold in October, compared to last year’s October sales
of only 89,000. Strong demand usually drives higher prices.
3. Investors and hedge fund managers have already sold a lot of gold
Beginning last year, hedge fund managers and
investors began unloading the precious metals in their portfolios. The
selling continues to a lesser extent, but with the big boys finished
selling, there should be less pressure on the price of gold.
4. Mines are closing or plan to close
The low price of gold is forcing mines all
over the world to close, because they can’t make enough money to
operate. Several Australian mines were closed, or scheduled for closure
this year. Right here in Washington State, the Buckhorn gold mine in
Ferry County is scheduled for closure in 2015. The longer gold remains
lower than $1,200 an ounce, the more mines will close. This reduces the
amount of gold available on the market and subsequently could make gold
more valuable.
5. The Federal Reserve has signaled that it will begin raising interest rates next year
By all accounts, the Federal Reserve is right
on track to begin raising interest rates sometime in 2015. So what does
this mean for gold? Well, higher interest rates typically impact the
value of the dollar. When the dollar goes down, gold prices usually go
up.
If you invest
in gold and silver when prices are low — and sell when they’re high —
you’re going to make money. Period. With both precious metals at
attractive prices, now might be the perfect time to invest.
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