In the Fall of 2008, panic hit the stock market and gold’s price skyrocketed. It was a crisis many thought would lead to gold being accepted as a mainstream investment for years to come. But if you bought gold in early 2009, you’ve been waiting all this time for it to have its day again. For five long years, investors have been wondering when they should get back into gold or whether they missed their chance already. You might be tempted to think that the recent economic problems in Europe will do what the collapse of Lehman Brothers didn’t: send people running for safety into gold, pushing up prices and opening new markets to an old friend.
The argument for buying gold now doesn seem like such a bad one: The eurozone, the UK and even the US are currently in a debt crisis. The markets have been rocked by downgrades of European countries’ creditworthiness, and gold’s price has taken off accordingly. Even so, if you look back on gold’s previous meteoric rise, this isn’t actually such a unique moment after all: it saw similar jumps following the financial crisis of ’07-’08 and during other crises over the last decade – most notably just before France decided to scrap its currency peg with Europe in January 1999.
If we take a closer look at some economic indicators then we can see that gold might already be starting to suffer from diminishing returns: Growth figures for China (the biggest consumer of gold) published recently were lower than expected, which could, in turn, slow global demand for gold just as supply is falling to historic lows.
Although having its ups and downs, the last five years have been pretty good for gold investors overall: Gold has grown by over 80% since August 2008 compared with an almost 40% rise in stocks. You might argue that gold has simply gone up because it s a non-interest bearing asset – but then again cash deposits only recently started paying interest again after nearly three years of standing at rock bottom rates.
It’s worth noting that although gold prices fell back slightly following the Fed’s surprise decision not to inject more stimulus into the U.S economy earlier this month, they’re still well rising and we’ve yet to see if the dip is just a temporary blip or the start of a downward trend.
The fact that gold remains volatile has led some traders to suggest that gold isn’t becoming any more stable at all. Even so, if you have a relatively cautious attitude towards your investments, it doesn’t mean you should completely rule out gold – after all, in uncertain financial times it’s best to diversify your assets… And who knows? After years of relative stability, maybe this time could be different and we will see gold’s long awaited “day.”
Of course, if you are looking to protect your investments against the threat of further market upheaval then you might want to consider taking out gold cover with a specialist Gold Insurance Company. These providers offer customisable – and in some cases tax-free – solutions that can help you access all the benefits of gold without actually having to physically own it.
It’s worth noting that gold prices fell back slightly following the Fed’s surprise decision not to inject more stimulus into the U.S economy earlier this month, they’re still well rising and we’ve yet to see if the dip is just a temporary blip or the start of a downward trend.
“…You might want to consider taking out gold cover with a specialist Gold Insurance Company”
The fact that gold remains volatile has led some traders to suggest that gold isn’t becoming any more stable at all. Even so, if you have a relatively cautious attitude towards your investments, it doesn’t mean you should completely rule out gold – after all, in uncertain financial times it’s best to diversify your assets… And who knows? After years of relative stability, maybe this time could be different and we will see gold’s long awaited “day.”
“If you look back on gold’s previous meteoric rise, this isn’t actually such a unique moment after all: it saw similar jumps following the financial crisis of ’07-’08 and during other crises over the last decade – most notably just before France decided to scrap its currency peg with Europe in January 1999.”
“Although having its ups and downs, the last five years have been pretty good for gold investors overall: Gold has grown by over 80% since August 2008 compared with an almost 40% rise in stocks.”
“Even so, if you have a relatively cautious attitude towards your investments, it doesn’t mean you should completely rule out gold – after all, in uncertain financial times it’s best to diversify your assets… And who knows? After years of relative stability, maybe this time could be different and we will see gold’s long awaited “day.””
“The fact that gold remains volatile has led some traders to suggest that gold isn’t becoming any more stable at all. Even so, if you have a relatively cautious attitude towards your investments, it doesn’t mean you should completely rule out gold – after all, in uncertain financial times it’s best to diversify your assets… And who knows? After years of relative stability, maybe this time could be different and we will see gold’s long awaited “day.”
