8 Reasons Why Gold ETF Prices Will Continue to Rise
Technical indicators are signaling a buy in gold and silver. Gold started the year at $880 and its been volatile at times but the gold price will continue to rise. Here are the reason whys.
Technically – indicators point to a continuation in the inexorable rise of precious metals. Technical indicators are signaling a buy in gold and silver. Gold started the year at $880 and, as I write, is now standing at $960, a rise of 9% and we are just into August – and this should be the quiet season. Admittedly its been volatile at times but the gold price will continue to rise.
Historically – gold is the asset to hold in times of uncertainty and that is what we are experiencing right now . Uncertainty is another reason Why The Gold Price Will Continue To Rise . Recent comments on the economy have been optimistic but these ‘green shoot’ claims are predominantly fueled by government organizations, banks and generally vested interests.
How confident should that make us feel? The Bank of England have, in effect, contradicted the government claims by putting another £50 billion sterling into the economy. This indicates the present level of quantitative easing (QA) is not yet effective.
Emotionally – the smaller investor is more fearful of risk, and responds to the drip-drip effect of hearing and reading day-in and day-out that gold is the asset to rely on to protect their wealth. The markets may appear to be booming again but they’re possibly just suffering from a bubble hangover.
This could be a secondary bubble ready to pop. The resulting fear is a primary reason Why The Gold Price Will Continue To Rise
Financially – As the dollar wavers, gold continues to creep up. Nothing too dramatic. Just a steady rise. Interest rates continue to remain historically low.
The message that inflation could soar, currencies collapse, and gold reemerge as the new global currency is promoting a rising tide of demand for bullion.
Productively with Price Suppression– Many well respected gold pundits have long been convinced the gold price has been suppressed. But, despite that the price still rises. How high would it be already if no suppression scheme existed? How does this effect production of gold?
Suppression of price reduces production which ultimately results in a shortage of the metal. Demand exceeds supply – and , the price goes up.
Strategically – despite the market momentum driven by large investment banks and hedge funds, the smaller, longer term investors are losing their appetite for risk and are beginning to see gold ETFS and shares as the better option. Gold shares have been sluggish recently, but once gold passes the US$1000 level again and sticks, investors will gain the confidence to buy into the mining shares again.
The ease of electronic trading makes it very convenient to buy bullion or share ETFs – easier than gold and silver bullion, and strategically placed for leverage on the increase in the gold price.
Creatively – creative accounting may well also influence the ultimate gold price rise. There are rumours circulating that the commodity exchanges allow gold futures contracts to be settled in shares of the gold exchange funds. (ETFs) rather than in bullion.
If there is ever a question mark concerning the amount of metal held by the ETFs in relation to the gold traded, the price will soar.
Politically – China has indicated its intention to increase gold reserves. Their 2 trillion dollar holding, which they already fear will be devalued, gives them the financial strength to move into stockpiling of real assets, and the acquisition of commodity based strategic assets, including gold as the ultimate US Dollar hedge.
Conclusion – the price of gold is like a river backing up behind the dam wall. When the streams of technical and historical indicators, financial pressure, supply shortage, creative accounting, price suppression and fear are running independently, their individual volume will have limited effect, but when they all converge into one flowing river, the panic will begin to build, and gold will start its stratospheric ascent.
The combination of these factors is Why The Gold Price Will Continue To Rise While you still have the opportunity buy now.
Anna P. Best was based in Singapore for many years where she developed her interest in precious metals. Until recently, Gold has not been an area the average investor would consider, but that has changed and suddenly there are so many opportunities out there to profit from gold and silver. Anna enjoys sharing her knowledge with other enthusiasts. She has prepared a complimentary report packed with facts which you can download at the Gold Report.