The New Year thus far has proven to be the opportunity many investors have been waiting for to buy gold.
Posted by Adam King on January 10, 2012
Buy Gold Before it’s News
January 10, 2012 – The New Year thus far has proven to be the opportunity many investors have been waiting for to buy gold. The December correction brought the spot price of gold to the mid $1,500 an ounce range, a far cry from the all time high in late August and September of $1,923 an ounce. The correction had extended long enough and far enough that some analysts questioned the validity of the gold bull market. After gold popped in last week’s trading, everyone quickly realized the dip in gold was just what the wake up call for anyone worried about the stability of the paper debt markets to get into gold.
The same type of action occurred after the September correction when central banks swooped in and began buying gold at rates not seen since the end of Bretton Woods in 1971. In other words, banks chose to buy gold at forty-year highs in September following the price dip. The current action in the markets, which is expected to extend this week, is a similar dynamic.
The New Year’s rally, which pretty much sputtered to a cold stall in the Dow and other stock exchanges, may be partially the dynamic at work here. In that case, look for gains to extend through the end of this week and into next to establish a bona fide bull bounce. Because banker’s got their bonuses and, as they do, put it immediately into gold upon the first trading session, it’s possible the pop in prices can partially be accounted for by that particular set of buying until time establishes the larger dynamic.
It would not be surprising to see a slight cooling in the price of gold as the New Year’s rally, if indeed there is one, begins to even itself out. As an investor, keep calm when seeing this and remember it is in line with a long-term healthy bull market that will show gains this year. Gold was the best performing asset, bar none, of last year. It will perform well this year.
The trick now is to get into gold while the price is still on the dip. Last week’s trading is already making a lot of news and pending events coming out of Europe and other financial markets are set to affect the gold market in their own way in coming weeks. Now is an opportune time if there ever was one to buy gold.
Stewart Lawson
Senior Staff Writer – Certified Gold Exchange
Categories:
US Gold Market
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