For several years now, the most common comment we’ve been hearing about investing in gold has been, “Gold prices are so low . . . stay away from it as an investment.”
That’s the common wisdom. It might be common. But it is wise? Not really. At least not according to an article entitled, “Gold Futures Roar to One-Year High, Near Bull-Market Territory” that Bloomberg Business published on February 11th.
The article contains a very perceptive analysis by Bloomberg’s Stephen Engle that pinpoints how gold prices have typically risen and fallen every year, for at least the last 10 years.
Here is what Engle has observed:
- Gold prices spike up in January and remain high through February. Why? According to Engle, as much as 25% of the world’s annual jewelry purchases are made in China in January, where gold jewelry is an extremely popular gift that is given at the Chinese New Year.
- There is a slight decline in prices in March, and then a small rebound.
- Then in July prices begin a decline that continues through December.
- And then in January, prices rise and the cycle begins again.
What Does that Cycle Mean for Gold Investors?
For one thing, the reality of that annual cycle exists disproves the common wisdom that says, “Gold prices are so low . . . stay away from it as an investment.” For another, it means that investing in gold in the final months of the year – or recycling gold and holding it then – can be a very wise investment strategy.
After all, the strategy that underlies most investing is to buy something at a low price and then sell it for a higher price, correct? And here at Specialty Metals, we have created a Specialty Metals Gold Pool Account that allows you to send us your gold recyclables now and have us sell the gold they contain when the selling price of gold reaches a dollar figure that you specify. It’s a smart way to position yourself now for price increases when they do occur.
Will gold prices definitely, absolutely rise next January? The truth is that is only a prediction, not a bankable fact. But whether trading prices rise next January – or next June, or next month for that matter – a Specialty Metals Gold Pool Account is a smart way to lock in future profits. We invite you to call us at 800-426-2344 to learn more.