What’s going with the precious metals market?

Over the last couple of months, gold has rallied to incredible heights. 2019 started off well with gold hovering between $1275 and $1325 but in the last couple of weeks the price shot up to $1515 an ounce. So far, the price of gold has reached levels that were last seen in 2013. It’s not only gold that has experienced surges, other precious metals also had impressive performances. Silver is one of them, so is platinum and palladium.

What caused this spike?

Precious metal investors have wondered if this was simply a fluke. Investing in precious metals became very topical especially now with the introduction of cryptocurrencies. Cryptocurrencies like Bitcoin have proven to be volatile. Precious metal investors buy gold as a hedge because it is not volatile which is why, Bitcoin isn’t attractive.

What caused the spike in the price of gold bullion and is this trend going to last long?

Analysts would have you believe that it all depends on the U.S federal reserve. It may seem unfair to people in other countries like the U.K especially the U.S Federal bank has no say in your country’s economy. Unfortunately or fortunately(depending on how you look at it) the price of gold is tied to the dollar. When the U.S Federal Reserve cuts rates it pushes the price of gold up.

In 2008-2013, the US adopted a loose monetary policy, the price of gold skyrocketed. What is happening now goes back a couple of years ago. Even though the economy looks great right now a rate cut by the U.S may mean the reserve is gearing up for a recession. There is data that suggests that a recession could be on the cards. Besides that, the political and economic tensions between the U.S and China, or the U.S and other countries and Brexit could be spurring the increase in the price of precious metals like gold which has always been a great hedge.

People don’t only buy gold for its shine and allure but they are selling their gold because the cost of living has gone up. It is becoming increasingly harder to live off one pay check, and having a nest egg of gold investments helps a lot of people to get through some of the emergencies because once in a while life throws curve balls you may have not prepared for.

Your gold does not have to be in the form of bars or coins. You could have gold jewellery, golden ornaments or broken jewellery or anything made of gold that can be melted refined and turned into something else.The best time to buy gold is when you need to. There really is no better time than that. If you are a buy-and-hold kind of investor then you might want to hold on to your gold. It is important though to have a list of dealers you can approach. It is something you might not want to overlook just because you don’t need money and quickly as possible when you buy gold.

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