The Gold market has seen a flurry of events recently, with the drop in prices and the massive demand for the yellow metal among the consumers. As a trader, huge market swings implies an opportunity because making money with gold is possible, regardless of what the market trend is at present. The bull market in gold is far from over, despite what the trend is.
This can be better understood by simply looking back at how gold performed during the 1970’s. We are at a similar phase right now. You can also be correct in suggesting that we are at present in the midst of a cyclic phase in gold. However, there is a slight amount of uncertainty revolving around this theory, as the prices are subject to interpretation. So here is an analysis of how the commodity might behave in the days to come.
What the charts do not say
When it comes to gold, what the charts suggest at present is that gold has experienced a bull market from 2002. They also suggest that gold has remained sideways from 2011. The drop in gold prices has been nothing more than a test of support. So the question that pops into the minds of most of the investors at this time is, ‘what could drive the prices higher?’ In order to answer this, we must consider several factors that cannot be deduced merely by looking at the charts.
At present, there are ample reasons to perceive a bullish or a bearish perspective when it comes to gold. That is exactly why we have seen several big investors shelling out all the gold they have, while the common consumers and retail investors have been buying up the yellow metal like never before. Whether you support a bearish perspective or a bullish perspective, one thing that you can definitely agree upon is that gold is not near the bottom yet.
The true appeal of gold
One of the reasons why buy gold has always been revered is because of the fact that it can survive any financial collapse. Although a total financial collapse is highly unlikely to occur at this point of time, the highly valuable benefit is that, gold has a history of being a safe haven for investors. The value of gold can never reach close to zero, because its intrinsic value has always been high.
Buying in a poor market
Buying gold in a poor market is always considered as a highly risky choice. However, if you look at things carefully, you will know that there is a huge potential in buying gold in poor markets. Many investors believe that there are some hidden factors that are acting in order to keep the gold prices low. If this turns out to be true, then you will not find a better opportunity to buy precious metals. Similarly, there are several factors that are also likely to propel gold sky-high in the near future. The very reason that the Central Banks all over the world have been actively buying gold is an indicator of this trend.