After a promising start to 2018, gold prices have been up and down for the past few months and it doesn’t look like it’s going to break out any time soon. Quite the opposite. There are now signs that gold could be slipping further down towards its December 2017 prices. Unless gold breaks through key resistance points, and with downward pressure defining gold right now, that seems unlikely, gold prices could be set to decline for the time being.
Should gold investors be worried? Quite the contrary, they should be looking forward to the opportunity.
Don’t Get Spooked by Low Gold Prices
Human nature is a fickle thing. Take the most fundamental wisdom of investing: buy low, sell high. There’s a reason it bears repeating: the human brain isn’t wired for that kind of thinking. When you set aside $5,000 in a stock, a fund, or an asset, and it goes down day after day until you only have $3,000, you’re worried about losing it all, so you sell. Then, as that same stock or asset starts to recover, you want back in, so you buy at $5,000. If things go well, several years later your investment is worth double, but you’ve spent $7,000 getting there. Don’t get back in at all, and you’ve lost $2,000 without participating in the recovery. It’s called loss aversion – the human brain is more sensitive to losses than gains.
Gold Is Forever
Gold is a long-term investment. At any given time, anywhere from 5 to 20 percent of your portfolio should be invested in gold, depending on the price of gold and other factors in the market. Never sell gold in a panic. It’s a smart strategy to take advantage of peak prices and reallocate some of that wealth. You can sell gold to dealers like Silver Gold Bull when the time’s right.But never be scared off by declining prices, especially if you haven’t seen a return on your initial investment. Gold has had a consistent value for hundreds of years and there are no signs that will change.
Buy Gold Low
Just because the price of gold now is going down doesn’t mean gold is in for a bear market. By most accounts, it’s already in one, looking to emerge. And there are a number of factors that suggest buying gold now will prove to be a smart move.
On the heels of new tariffs on steel and geopolitical factors, both steel and gas are quickly rising in price. The U.S.’s steel tariffs are expected to lead to a $300 increase in the cost of vehicles, while gas prices are also leading inflation. Rising inflation also means rising gold prices as investors hedge against the eroding power of the dollar.
Instead of letting falling gold prices spook you out of the market, use the opportunity to increase your position and buy cheap gold. In addition to low spot prices, online gold dealers like Silver Gold Bull also offer low premiums. The more you save on gold, the better your returns when you sell.