It’s not too late to invest in gold. RS gold is up by 24% and is expected to go higher. Today, there are several reasons why you should invest in gold and paying attention to these reasons will help you feel comfortable about your investment. There are a lot of factors involved that are creating gold to skyrocket and these factors make buying gold a very good investment. The savvy investor will heed these economic conditions that make gold an attractive investment. At this time, owning a precious metals portfolio is a good idea. Below are some of the reasons why gold will increase in value and could rise to $2,000.00 an ounce.
Now, that the government has put trillions of dollars of stimulus money into banks and businesses to ward off a global recession, this excess money in the marketplace will eventually boost up prices for goods and services. This causes inflation and lowers the investors’ confidence in paper money. Therefore, the investor will buy gold to protect their wealth against inflation and, thereby, making gold go higher.
Volatile Stock Market:
In 2008 the stock market turned down dramatically as the global economy went into recession. While the stock market has somewhat recovered, it still remains volatile. Because of this global economic recession, it created new gold investors along with established gold investors, which drained the gold inventory, thereby, driving up the price of gold. Investors will buy gold to preserve their wealth against a volatile stock market. This makes gold go higher.
Downturn in Real Estate:
Real estate was always a great investment RS Gold until the housing debacle. Homeowners have lost from 18% to 50% of their homes value depending upon where you live. Buying gold will help to protect you from these difficult and trying times. This will make gold go higher.
Because of their huge trade surplus with the United States and Europe, they are buying the United States debt as well as diversifying their resources by investing in gold. Since China is now a large gold investor, this is creating a supply shortage. This will make gold go higher.
Low RS Gold Prices and Environmental Controls:
In the 1980’s gold was $850.00 an ounce. Then in 1999 gold dropped to $252.00 an ounce. Because of the low price of gold and the environmental controls that were placed on mining of gold, this discouraged mining companies from discovering new supplies of gold. Now, this creates a shortage of gold and the supply of it is not meeting the global demand of gold. This will make gold go higher.
Low Interest Rates:
When interest rates are low, investors will look away from paper assets and look toward gold. Therefore, there is little incentive for hedging which will result in the removal of gold from the market. This will also shrink the gold supply creating another lack of balance in the marketplace where supply does not meet demand. This will make gold go higher.
The United States economy has been hit with a tightening up of the credit market because of the losses associated with the housing and financial areas. The Federal Reserve in an attempt to lift up the economy out of the recession, they cut their interest rates to nearly zero. Rate cuts pushed down the investment returns on paper assets making many of the investors buy gold. This will make gold go higher.
All of the above creates higher gold prices and in this economic recession where the currency is declining and inflation is looming there is no better time to invest in gold. This is why everyone is buying gold and will continue to do so.
Remember gold has nearly quadrupled in ten years since going from $282.05 on January 4, 2000 to $1081.50 on January 30, 2010 Bad economic times run up the cost of precious metals and the economic recession we are in now is no different. The housing market is very weak, the dollar is weaker and business is slow. As a result of all of these economic conditions makes the price of gold go higher. Gold is a commodity that is subject to the normal forces of supply and demand.