If you’re thinking about purchasing gold bullion for your precious metals horde, then more power to you! I think you’re making a great decision, because here’s the deal: according to the gold gurus, the price of gold is only going to rise.
Things are looking very good at the moment for investors.
What’s That You Say?
It’s up to you to decide whether or not to spend money on gold bullion, but the signs for a continued price increase are all there, and I’m certainly going to invest more of my own money in the yellow metal.
I’ve discussed several times in other articles and blog entries the fact that our global gold reserves are only going to dwindle, even as gold’s value to industry increases. That’s a big reason to invest, and here’s another.
In 2008, longtime gold bug Jim Sinclair issued a claim that gold would hit $1650 by mid-January 2011, before taking off toward $5000. People sneered at him, even though he was willing to put his money where his mouth was, staking one meeellion dollars on it (you have to say that with your best Dr. Evil drawl).
Apparently no one took him up on it, because they thought he was stupidly bullish. After all, gold was already a princely $900 an ounce, which seemed remarkably high. No less an authority than Goldman Sachs recommended, in fact, that investors sell their gold back then.
Yeah, GS is looking a little less-than-visionary right about now. And they’ve pulled an about-face: they issued a 12-month forecast that called for $1650 gold by October 2011. Not quite in agreement with Sinclair, but close.
Bear in mind, now, that this was a revision of their previous 12-month prediction, issued in August 2010, of $1365. That peak came and went in early October. Oh, and their silver forecast? It jumped from $22.80 (surpassed in early October), to $27.60.
Silver is now trading in the $40-$42 range. So okay, maybe Goldman Sachs isn’t as on the ball as they should be.
If $1650 gold looks iffy to you, then remember that the London Bullion Market Association recently predicted that gold would hit $1450 by September 2011, and as of this writing, they’re looking pretty darn smart. Gold has already spiked over $1800 once or twice in day trading.
A Few Tips
In all seriousness, if you do decide to buy gold bullion, be very careful: gold is highly priced at the moment, so stop and think before you strike. To save money, try to catch your bullion when the market price dips a bit, because it’ll almost certainly go back up.
Also: I recommend coin bullion over any other variety, and the coin bullion issued by the U.S. Mint is always your best bet, since it’s backed by Federal guarantee as to weight, quality, and purity. That makes it easier to sell quickly, too, since you don’t have to worry about assays the way you do with bullion bars.
Never buy sight unseen unless you have an ironclad guarantee, and don’t buy old, circulated gold coins. While they may be gold, they’re likely to have a premium attached, since you’re competing with collectors for the very best coins.
Even when the coins are in degraded condition, you still have to compete with collectors, plus they’re likely to have lost some of their gold content — either from deliberate chicanery, or from sheer wear.
Purchasing gold bullion is hard enough as it is; there’s no need to make it any more difficult!