Do not wait for a pullback to buy gold! Every investor needs to know that gold is a hedge against inflation. The movements in the gold market have been monumental, and there are several reasons for that.
For one, the official inflation rate is about 10%, and investors are getting out of dollars and into gold coins, gold bars, and gold bullion as a hedge against inflation. Buy gold bullion, gold ingots, and gold bullion coins to protect yourself during inflation.
If you have not seen the gold price lately, it is going to the moon. The demand continues to surge as worried investors seek shelter. Many countries China, India, and Russia are diversifying out of dollars and into gold bullion. The IMF recently sold 200 tons of gold bricks to Indias central bank.
The amount of gold per capita on the planet is currently 23 grams. That does not even amount to a one ounce coin. The available mined gold on the planet amounts to about $3.7 trillion.
The amount of gold above ground is–0,000 tons and that number goes up by 2,600 tons every year. With this 2% increase each year, it doesnt scratch the surface of demand placed on the yellow metal.
The demand is 4,000 tons/year and rising exponentially. Gold has been selling for about the price of production prior to this price rise.
Due to the low prices in gold and silver, mine supply has decreased by close to 10%. Seeing how the fundamentals for gold show that the demand outweighs the supply and has for a long time, then why has the gold price been suppressed until recently?
Why has the price manipulation occurred? There are several factors. Central banks have attempted to suppress the price by selling gold bars onto the market. This tactic did work, but the banks are running out of gold to use as a suppression tactic.
The answer is that there are a few factors that have caused this price suppression and they are still to blame. The central banks have been selling their gold supplies onto the open market in an attempt to suppress the price. It has worked, but central banks are running out of gold to sell.
Another factor that has suppressed the gold price is the advent of paper gold (i.e. exchange traded funds, futures contracts). These investment vehicles simply give you the price exposure to gold. The futures contracts on the COMEX will allow you to take physical delivery of your gold, but many investors are finding that the COMEX is defaulting on the delivery. The default is occurring because the COMEX does not have the gold that they claim they have.
You are left holding paper rather than gold in COMEX contracts or ETF shares. These paper gold investments serve a purpose for the government, and that is to help prop up the falling dollar.
All of these gold suppression tactics are starting to come unraveled, and with inflation setting in there is no doubt the gold price will continue to explode. Stay away from paper investments if you can, unless you know for sure that they are legitimately holding the gold. Stick with American Gold Coins, American Gold Eagles, and gold bars.
You have every reason to buy gold now due to the falling dollar. Just look at the gold price in the past month. The price of gold per ounce one month ago was $1,058/oz, and the current price of gold is at $1,140/oz. Smart investors are going crazy for gold coins because gold is the only safe investment right now. Educate yourself about the benefits of investing in gold and how to buy gold. You wont be sorry!
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