In the words of Goldman Sachs, “Few people will lament the passing of 2011,” but those of us who have been and will be buying gold are looking forward to the New Year.
Posted by Adam King on January 03, 2012
Buying Gold in the New Year
January 3, 2012 – In the words of Goldman Sachs, “Few people will lament the passing of 2011,” but those of us who have been and will be buying gold are looking forward to the New Year. Even considering the multiple shocks sustained by the markets in 2011, the nearly unending parade of political crises we have witnessed, and the precious metal corrections of September and December, Gold is still the best performing asset of the year. While Bank of America stock languishes around $5 a share, down from $40 a share, gold is up 10.19 percent on the year.
The December correction, which has currently placed gold at the most affordable price we’ve seen in months, skews the data a bit. Gold gained 29.62 percent in 2010 and the gain in 2011 would be closer to that number. However, the year happens to end following the correction in December, which began on the heels of the European deal, which allowed banks to swap dollars at artificially low rates, pumping massive amounts of liquidity into the system.
This, of course, after 2011 saw the spot price of gold reach an all-time nominal high in the month of August. At $1,923 an ounce, gold had gained over 600 percent for the decade and began a cooling phase in which the price corrected over 20 percent. Some analysts were calling an end to the gold bull market then, as some have been in recent weeks. But in December it was released that during the third quarter of 2011, after the correction began, central banks around the world bought gold at record highs not seen since the end of Bretton Woods in 1971.
Clearly, the central banks of the world have a firm disbelief that the bull market in gold has ended. As the current correction shows signs of stabilization and even reversal, it will become apparent to all investors in the next few days that the gold bull market is here and here to stay for quite a while.
As the New Year in gold begins, the question you need to ask yourself is how much do you want to buy at what price? The investment will pay, just as gold has generated a 600 percent return in the decade, but you must decide to begin. Once you’ve bought gold, it’s merely a matter of allowing the investment to mature, i.e., you can relax. Buying gold is the investment of the future and the sooner you make that investment, especially at recent prices, the sooner you can get in on the investment of the year.
Stewart Lawson
Senior Staff Writer – Certified Gold Exchange
Categories:
US Gold Market
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