Buying Gold While the Market is Quiet
Posted by Adam King on April 02, 2012
Buying gold may be the best decision while the market is quiet. With the extreme surges we have seen in the gold market in the past years, it is sometimes difficult for investors to know when to buy. Given the fundamental strength of the gold market, the answer to that question is always. However, on a relative basis, some buying points are better than others in the market.
Usually, when there is a significant political event in the United States we see buying on the dip explode in Asia. India and China are the two biggest gold markets on the planet with a societal history of valuation. They have been buying gold as a store of wealth for many thousands of years and they typically store it in the form of jewelry, which is why the tonnage of gold imported into the countries is classified by use.
Time and again we have seen the buying Asia heat up even as news kept the market low in America. Most recently the delay of Quantitative Easing is a very good example of this dynamic. Gold prices began a correction in this country, which has lasted for about five weeks now. During this time, prices have been upwards of 10 percent off recent highs. This is purely correction territory, which means that all market fundamentals are still in place of for a much stronger gold market going forward, but certainly the occasional correction can confuse some investors in the US while buying in Asia remains strong.
Right now, the correction has dragged for long enough of a time that most analysts and investors are anxiously awaiting the next step in the market. We cannot be sure at this point where the next major news that sways the market with come from, but we can be sure that it will contribute to a strong bull market environment in which the price of gold goes much higher than it is now. This means buying now, while the market is relatively quiet and there is not drastic news flipping the price, may be the best time to buy over the coming days and months as we see the gold market begin to incorporate more of the strong market fundamentals that will bring the price higher.
Stewart Lawson
Senior Staff Writer – Certified Gold Exchange
Categories:
US Gold Market
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