Talk to a precious metals broker and they’ll tell you that gold prices are currently low. Prices so low, they’ll say, that they’re at “On Sale” prices.
Is this true?
As of this writing, gold is hovering around $1,200 an ounce. Why is this considered low?
Because the cost of mining gold, given all the expenses of digging and processing, taxes and interest payments, etc., runs from $1,100 to $1,200 an ounce. Does this mean that gold can’t go any lower? Not necessarily, but here’s why there is a good chance that the price won’t drop much lower than it is today: At current price levels, gold is considered at its threshold. This means that it becomes no longer possible to mine gold at a profit. According to the World Gold Council, current prices will force cutbacks in production. Digging stops and this in turn will cause supplies to decrease. The hope will be that a diminished supply will eventually bring the price back up again.
While it is, of course, impossible to make an investment in gold forecast with any certainty, the indicators look very promising. The year 2015 could be a banner year for gold. Many respected financial advisors and precious metals experts including billionaire David Einhorn, Fund Manager Jim Rogers, analysts Peter Schiff, and Swiss economist Marc Faber all see a very bullish year ahead for gold.
What do they see happening?
No Matter Where the Economy Goes, Gold Is Still Real Money
In history, no paper currency in the world has survived in its original form. Historically, paper currencies eventually will inflate away until they are worthless. The dollar’s purchasing power has declined by 90% since 1950. The situation is also the same for most other currencies. Be it war debts, entitlements, or excessive spending, governments have never been able to resist simply printing more money to pay their debts.
Unlike currency, gold has no liability attached to it.
Gold has represented real money for thousands of years. When you own gold, whether paper money fails or banks shut their doors, you are still able to hold value. Remember Iceland? There was an example of how money can lose value overnight. With our own massive debt levels and excessive money printing, the U.S. runs the risk of a similar default.
Gold has proven over time to be an excellent investment that holds its value in real terms. Most importantly, gold appreciates during periods of high inflation, deflation––which we’re beginning to see now––and financial instability. Since gold is in limited supply, it cannot be printed to finance the deficit spending of governments.
The total value of all gold produced in 2013 was around $100 billion. Compare that to the total of the investment market which is around $150 trillion. The gold market is miniscule in comparison. Imagine how a slight reallocation of investments into the gold market could make the price of gold soar. Presently, gold production is stagnant and there are no major mines coming on line. In addition, central banks and bullion banks now have very low stocks of physical gold. The upside is these low stocks limit the ability for gold prices to be manipulated in the paper market. When investors realize that sellers of paper gold won’t be able to deliver the physical gold, there will be panic buying of gold at much higher prices.
Before you invest any of your money, make sure to do your homework and get the best information available. You can begin by downloading a FREE mini-course that will help answer many of your questions about gold investing and coins, which coins are the best investment, and investing gold in an IRA.
In our gold guide you’ll find answers to questions like:
Full of answers to these and other questions as well as many important money saving investment tips, this guide has helped teach many of our clients to invest like experts. If you’d like to save precious time and possibly thousands of dollars, you need to read this today!
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