Is Now a Good Time to Invest in Gold?

By Lawrence Reaves 

Gold has been enjoying record breaking price rises over the last couple of years. This has been thanks largely to the poor economic climate, and the financial crisis which sent shock waves around the global system. The question many people are now asking is whether the gold market has topped out and if so, should they buy or sell?
Gold broke through the record $1,200 an ounce ceiling last year, but it has bounced around for some time. There is a lot of market uncertainty which is fuelled by the slow, but definite improvement in the underlying economy, particularly the recovery in the stock markets and the easing concerns over interest rates.

The Buy/Sell Decision
Buying gold makes financial sense when the stock markets are falling and the economic outlook is grim. Governments and institutional investors buy gold as a hedge against inflation and to prop up the value of their currency; buying gold also makes sense because the value will increase as times get harder. The gold market is therefore populated with more buyers than sellers, and the demand for gold will force the price ever upwards.

Selling gold makes financial sense when the economy is picking up and stock markets are rising. It is better to invest in stocks and bonds where there is real growth and inflation beating returns available, rather than hold gold. The lack of buyers for gold results in the price of gold dropping.
So, should you buy or sell?
This depends on your outlook for the economy. At the moment the indices are starting to look positive for an economic recovery which means that the smart money is selling gold. This is reflected in the plateau that has been reached in the gold price after breaking through the $1,200 ceiling. In fact, the price of gold has started to slip in direct reaction to good economic news.

For individuals who have gold, usually in the form of old jewelry, the price of gold is at an all-time high. More positive economic news will certainly lead to the record price for gold dropping further, and it is likely that the price of gold will go into freefall as investors look to unload their holdings and move back into the stock markets.
This means that there is a strong SELL recommendation for gold holders.

How do you sell your old gold?
Selling old gold items is simple. Go online and find a company which is a "refiner"; this is a company which will actually take your old gold and turn it into "new" gold. Refiners will advertize their "spot" price for gold, which will fluctuate on a daily basis, so be sure to check it frequently. Once you have found a company you wish to do business with, they will arrange for a secure courier to collect your items, they will then appraise them and make you an offer. You can decline the offer, in which case they will be returned to you, or you can accept the deal and a check or bank transfer will be with you within a week.
It's as simple as that, so remember NOW is a GOOD time to SELL your old GOLD.

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