GFMS Report Predicts 2013 Price Recovery
Gold has once again found itself in the news. The precious metal is enjoying somewhat of a resurgence this week, with GFMS forecasting prices to reach at least $1,800 per ounce by the end of 2013.
According to Reuters, GFMS sees gold prices pushing back up throughout the year, riding just below last year’s highs. This could, however, make way for a bear market in 2014 as central bank purchases begin to drop off.
Currently, gold is trading at just over $1,500 per ounce. The current price is an improvement over what had been seen previously, although it’s no secret that the metal has come upon a variety of issues recently. The lowest price since May of 2012 was hit this year, prompting many analysts to believe that gold may indeed continue losing value.
It hasn’t been easy for gold across the board. Gold investment throughout the entire world fell slightly last year, and other metals such as silver and copper have seen quite evident fluctuations in pricing in recent months. While gold was perhaps thought to be entering into another difficult period, the recent report from GFMS shows that this may not yet be the case.
Gold’s Safe Haven Status
It would be hard to believe that the recent financial happenings throughout the world haven’t had a dramatic impact on the price of gold and currency fluctuations. The recent financial crisis in Cyprus, for example, caused investors the world over to reevaluate where and how they store their wealth, with many now looking towards alternative methods such as precious metals.
The Eurozone has experienced a great deal of issues in recent months between uncertainty in Italy and the bailout in Cyprus, which have not only put strain on all those involved but have also caused many to question the stability and future of the euro.
Meanwhile, in America, the economy seems to be continuing on a slow yet steady upslope. Unemployment rates are falling, people are spending money again, and the American economy is finally getting the jump-start it has needed for year. Especially evident in the housing market, the improvement in the country’s economy as a whole simply cannot be undervalued.
The issue at hand is that the financial tension seen in Europe has spread clear across the world at this point, affecting Americans in similar ways to those overseas. With the national deficit at a record high, many have concerns over the stability of American banks and the dollar as a whole.
While it’s unlikely that an event similar to that which occurred in Cyprus could affect the U.S., that doesn’t mean it’s not possible, and some still feel as if alternative investing methods are right for them.
This is where gold comes in, as well as new investment opportunities such as Bitcoin. The digital currency has skyrocketed in price over the course of the past two years, and it appeals to many investors due to the massive amount of attention and publicity it has gotten as of late.
Bitcoin is, in many ways, similar to gold in the way that it is traded and valued—the precious metal of the tech era, one might say.
Gold has, in essence, become somewhat of a safe haven for those who are looking to allocate their wealth in as risk-free a manner as possible. If a financial crisis ever were to occur, gold would not only hold its value and benefit investors, but it would also be accessible in scenarios where banks might close—as happened in Cyprus last month.
The question as to which way is best to invest in gold—stocks vs. bullion—is somewhat difficult to answer. Stocks may present more variation when it comes to potential gain, but this could also lead to potential losses as with any other stock purchase.
Bullion, on the the other hand, is a tangible product that is more likely to enjoy stability in the long-run. Think of the latter as a safe bet, with the former being a tad riskier, yet perhaps showing a better payoff. You can learn more about investing in gold here.
Gold is certainly not likely to slow down in the news anytime soon, as the twists and turns seen over the course of just the past few months have been exciting to follow. While anything can change, now may indeed be the time for investors to start paying attention to the metal once again.
By Erik Neilson
Monday, April 8th, 2013 – Wealth Daily