Experts say it's time to buy gold again
The precious metal is just coming off of a four-year low, and some observers say a prolonged rally is ahead.
Some of the new enthusiasm on Friday came after a note to clients from analysts at JPMorgan (JPM). The bullishness about gold was echoed in other areas of Wall Street as well. Bloomberg reports that 13 analysts think gold prices will rise next week, while four thought prices would drop and five were neutral.
Here are four reasons why JPMorgan and others say gold is now good.
1. Gold's fall is probably over. Gold fell 25% and gold equities fell 50% over the last 10 months, but stocks rose about 13%. "Gold has bottomed, of that there can be little doubt," asset manager Adrian Day told Kitco News.
2. Gold demand is strong. Consumer demand hit its highest level ever in the second quarter, CNNMoney reports. New interest was coming from consumers in the Middle East and Turkey in addition to the traditional large markets of China and India.
3. Gold could see a supply squeeze. South African mine workers have been threatening strikes against gold producers for months. The National Union of Mineworkers this week rejected the industry's offer of a 5.5% wage increase, AFP reports. If labor strikes take place, the resulting decline in supply could drive prices up.
4. Gold prices generally rise in August and September. That's partly because there are seasonal festivals during this time in India, which is the largest single gold market.
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The time to buy gold was 2004. Get a 15 or 20 year chart and see the big picture. This is the mother of all bull traps.
The risk vs. reward @ this price is lopsided today. But don't let me stop you "end of the world" types from buying it. I wouldn't hold onto too many USD's either. Balance, diversification and wisdom.
Take a look at the price of gold in the 1970s. It looks like the same thing is going to happen again, and it might be a bigger rise because of the fed's policies of expanding the money supply by a TRILLION plus dollars per year, with NO signs of letting up. They can't keep doing this without inflationary consequences. At least in the late 1970s the fed took away the punch bowl and let interest rates rise until they slowed inflation back to tolerable levels. This time around it's WAY TOO LATE for them to do that because the money supply is OVER four times what it was and NO signs of slowing down the growth of it. The money has got to go somewhere, and it WON'T stay in the market forever. Take a look at what happened from 1927 to 1929. Once the market starts to stumble, [and it looks like it might be happening now] the money flees walls street, and people sell as fast as they can.
I don't know about you, but when I buy something, I take physical possession of it. Anybody buying paper gold, is gambling BIG time. And they're going to lose when the [paper gold] bubble bursts. As for physical gold and silver, there IS enough to go around, because the price will always be what people are willing to pay. If it goes TOO high people will simply stop buying because they can't afford it or are unwilling to pay the price.
Buy gold and watch it go lower.Hasn`t it been a great investment this year?No wonder gold
bugs are mad at the world.
What "consumer" demand @ 1K or whatever an ounce? The "manipulators" in the markets (big players) use this as a hedge to "shore" up their stock and bond positions. It is "controlled"...the pundits are just letting us know again that the "game" is on.......again. Give it a rest! Churn on!
Buy gold and you get a free bank to "store" it in. Ludicrous!
Buy great stocks.It`s worked for me the last 20 years.Plus, every time I turn around I get a
nice dividend check in the mail.
HSBC says that silver will top off at 23.00 an ounce and then go back down. I agree. Just look at the 5 year chart for stock symbol SLV. It still appears on the down trend. It is a suckers rally. Better off buying DSLV. a 3X bear silver ETF.
In less than 2 months, DSLV dropped over 50 %, due to silver prices going back up. When silver drops again, it will go back up. But maybe not back up to 91.00 a share. It currently is at 40.72 a share. Just look at the 3 month chart and see for yourself.
Short term silver may go a little higher before going back down, so do not panic and sell DSLV at a loss. Just be patient, which is hard to do for many investors. Just dollar cost average in and you should do just fine.
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