Is It Too Late To Hop On The Gold Train?

Everyone from central banks to people saving for retirement are wondering whether now is too late to buy gold or whether the recent price increases will keep going. Gold has beat the market in the last two years, and kept even with it over the last 20 years. The rise in price of the last year, however, has made gold appear to be an extremely lucrative investment. Many investment professionals have said that gold doesn’t turn a profit like a business and is inherently impossible to evaluate, because it is merely driven by investor sentiment rather than a change in its underlying true value. In reality, much of the recent increase in gold demand has been driven by an increase in its usefulness. De-dollarization has led many central banks to use gold to fill in the gap left as a medium of exchange. While the international Geopolitical factors that bumped the price of gold up are present and continuing, there is also a share of the gold price increase that is from speculators and fearful investors, which can go away at any given point. The most difficult challenge for those wanting to invest in gold today is to figure out how much of the increase in gold prices is structural, and how much is related to these shifting sentiment-based factors. While some of the price of gold can be shed if investors lose faith in the metal, the price increase from use value will be lost with much more difficulty.

Gold is near an all-time high, but most analysts are bullish on its short and long-term price. This consensus comes from the fact that the conditions that led gold to get this high have no sign of stopping. The recent all-time high would make most critical thinkers prepare for a popped bubble. Just like many other times in history, investors could be piling onto an already overbought asset. If public opinion sours on gold all at one time, it will be easier to estimate how much of the current price increase was structural, and how much of it was speculative. While it might be appealing for the public to wait before trying to buy in, the problem is finding a reliable stronghold for your money until then. While gold could potentially have a price drop in the future, keeping your money in dollars is certainly not a viable alternative. If someone knows of any asset that they can guarantee will rise in value over the next two years, they should share that information immediately with SchiffGold. However, due to the unlikeliness of this ever happening, it is important to understand the range of likely outcomes to owning gold if one were to buy it in the next few months.…