Now the prices of gold have come down is this a good time for buying gold ?

Question

Now the prices of gold have come down is this a good time for buying gold ?

Answer 1

Others might tell you different, but personally I would not be building a position in gold right now. Commodities and Gold in particular trade to hedge inflation and most importantly, a weak dollar. This is because investors do not want to put money in paper backed securities if they are afraid that the dollar will weaken further.

The reason that Gold has accelerated to it's recent highs and that the dollar has been falling for the past three years against foreign currencies and in the Last year in particular is that the FEDs have rapidly slashed interest rates and had to inject billions of dollars into the banking system, essentially

proliferating money (commonly known as "injecting" money) which dilutes the value of the dollar and causes inflation. For many reasons, the Dollar has recently started to strengthen, and I would truly expect it to continue to strengthen especially as the FEDs start to raise interest rates, and have publicly hawkish on returning to Greenback to it's former glory, and restoring the banking system to inherent stability. As a result of investors anticipating this behavior, gold prices have begun to drop, and probably will continue to do so for a while.

That's not to say that Gold might not fluctuate here in the next few months as inflation issues and recession worries continue, but I sincerely doubt 900 is a realistic target in the next 3-5 years. Some of the greatest Commodities Investors and Hedge Fund managers have already openly stated in recent weeks that they are selling their positions in gold, or already have done so because of this predictable decline. I have also read and seen some interviews where they are even considering SHORTING gold, which means they are basically willing to bet money on margin that gold prices will drop over the next few years.

So long story short, I would say NO, now is not the time for gold. We might even see it approach the $600 level again, and i would confidently suggest we will see $700 before we see $900 again. So it's just something that requires monitoring of economical events in order to maximize your investment.

Answer 2

In the seventies, at one point gold was three times higher (adjusted for inflation) then it is today, so much for gold as investment

Answer 3

I believe it is a very god time to buy gold.  While it may go up or down in the short run, it will go up over the long run due to inflation, which is effecting almost all countries to some extent.

Grandpa

Answer 4

only if you're using euros to pay for it.

Answer 5

My opinion - No.  If the common person like you and me are asking the question, then the really smart people have already made their decisions and we typically become their profit as we buy in and values fall.

I don't mean to sound cynical, but you'll find experts saying the same thing.

Gold always goes up or down.  You should only buy it either as part of an overall long-term investment strategy -or- strictly as speculation with money you can afford to lose.

Answer 6

No, if you want to buy gold, wait for this pullback to run its course. It should bottom around $650. Even then don't expect a quick rebound, gold could languish at the $600 - $700 level for quite some time. But if you want to hold gold as a hedge, then $650 is the level to start putting money in at.