Reasons to invest in gold in 2017

Reasons to invest in gold in 2017

Gold investments for 2017 is on the rise as investors are gathering in great numbers to invest in the precious yellow metal. In today’s market, this trend is largely being seen happening due to the unknown nature of the country’s economic policies. At the moment, gold is at a three-month high despite good stock prices and improved economic situation across the globe. However, investors are spooked and are moving towards gold. A few more reasons for this move are the political anxiety in Europe, anger at rising inflation, falling dollar rate against foreign currencies, and stimulus from central bankers. In 2017 alone, gold has surged 7.5% and it is currently at its highest since November 2010.

So, what is prompting the gold investments for 2017 phenomenon?

Reasons for gold investments for 2017

  • Holding gold has become attractive with a combination of lower bond yields and higher inflation. If the rate of interest on a 5-year bond minus the inflation shrinks / becomes negative. Politics and consequences of policies are building trade barriers and harm the economy. In such a situation gold seems more attractive. Gold has risen while dollar has weakened. It is at a 52-week high at 7%, index has fallen 3.6% leaving it below 2.5% in 2017. Gold is likely to surge higher if the stock market suffers a decline.
  • A good investment: The gold investment 2017 is positive, the price range prediction from $1200 to $1500.
  • Buy gold: It is difficult to predict the financial market. They respond to basic fundamentals that determine the asset price. Underlying dynamics blunt the final arbiters over long term. Realities, economic and political systems make a strong case to invest in gold.
  • When it is safe: Few investors / traders recall when there was so much turmoil in the world except during the world wars. Bad economic news is commonplace today they are all waiting for the financial crisis. So the next safe bet is government bonds. The next safe haven is gold. It is the choice for the scared investors and managers. The financial outlook is grim with low commodity prices, scrawny global trade, and diminishing capital flows.
  • Paper currency: When the consumer and markets lose faith in paper currency gold is where an individual is able to save. Gold has never lost its intrinsic value in the local and global market.
  • Investing in gold: The dollar is currently the world’s leading currency when the dollar is weak, gold offers greater value. Few buy Gold when the dollar is strong. The strong dollar shows a safe market. Falsely maintained dollar has come under attack as it will depress the gold price, economic stagnation. The strong dollar has also depressed the price of gold, but this should not be the price of gold.
  • Bank and fiat failures: People have faith in every economic system. Fear creates failures, and there is a lot happening in today’s currencies and the economy is creating an alarm.
  • Central Bank gold holdings: It plays an important role in world’s supply of gold. Gold is an indicator of wealth and stability. It is a precious metal and is closely monitored. At least 30,000 tons of gold is held in the government vaults, roughly 18% of the world’s supply. The banks buy and sell gold depending on the global and national needs. This affects the gold supply and demand, and hence its price. This has a major psychological impact on the gold market based on the central bank activity. Governments know that gold holding is a major indicator of stability, and investing more now will reduce the global economic instabilities. For Central banks gold is a safe haven, and an excellent change from paper currencies.
  • Interest rates: Traditional market wisdom says that high-interest rates push the gold prices down. This is based on the simple fact gold pays no interest. Short market players react to minute price changes, long term investors look at the fundamentals of these cycles.
  • Supply and demand: Combined factors affect the price of any commodity, e.g. gold; it all comes down to supply and demand as an investment. The supply of gold is limited to the amounts available above ground, and production costs. This ensures that supply will rise only when the price increase justifies it. The ultimate goal is to protect and increase the purchasing power of your portfolio. The seven factors above support gold as an investment hedge and wealth protector.

The challenge is to get ready for the current global financial situation and take proactive steps to meet the primary goals towards lold investments for 2017. For many, gold investment is the most important.

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