2013 has not been an exceptional one for those investing gold bullion. With the prices peaking in 2011 when gold cost about $2000 an ounce, now it has plummeted far below $1500. Just about a fortnight ago, gold dropped by a record, 9.3% in a single day which is the lowest in 33 years. However, despite all the negative market trends, gold buyers have never been as enthusiastic as at this point of time and everybody seems to be happy about purchasing more of the precious metal at low prices. The question that arises now is whether it is the right time to buy gold, or is it a mistake to amass the precious metal given the circumstances.
Is it a rare opportunity?
Asian bullion buyers have been the most enthusiastic of all at present with almost everybody buying some amount of the metal, through online sites to hedge themselves against the evident inflation. Though Asia has been leading the trend of buying gold, with the purchases hitting a ‘record high’ in China and India, this trend is also being felt in the US. The US mint has been issuing coins vigorously and their sales have gone well past 100%, leading to the temporary suspension of sales in order to replenish the supplies. While a global unavailability of the metal is still a thing of the future, the world markets are at a unique circumstance as far as gold is concerned.
This is because; the demand for gold has risen at a time when the outflow from gold ETFs have hit a record high. The price of gold on paper and actual physical demand is very different at present. The economic situation has reached a level where it is absolutely necessary for every investor to include gold in their portfolio before the situation becomes worse.
Safeguard against inflation
Gold has been regarded as an insurance for a long time. Recently it was being regarded as a safe haven against the dropping USD. With all the major central banks around the world releasing more paper money into the market, gold has now turned from just a hedge against inflation to an insurance against any major economical catastrophe. This has presented all gold bullion buyers with a rare and unique opportunity to safeguard their wealth, despite the trend where gold markets have not been doing very well in recent times.
This is because of the ability on this precious metal to bounce back very strong, after nearly a couple of decades. History is witness to this fact and it would definitely repeat itself in the near future, as the USD gets stronger. The real question that needs to be answered at this point of time is how will the gold commodity markets perform over the next decade or two. In such a scenario, it is important to take a close look at the GDP and the budget deficits that could lead to a severe inflation. The GDP and budget deficits at present are indicating a favorable atmosphere for buying gold.