Gold Price Warning

Gold Price Warning.

Gold prices hit a peak back in January 2013 at $1,683 per oz. amid issues in the United States with budgets not being agreed and economic turmoil across the globe being the major concern for investors. 

This was nowhere near its all-time peak in $1,920 in 2011, but since then economic confidence has returned and Gold prices have fallen to £1,204 in December 2013.

This was driven by a bullish stock market as equities do pay interest in the form of dividends and gold does not, it is seen more as a safe haven. 

This means that Gold suffered losses in 2013 of over 30% and since 2011 has suffered losses of 37%.

Comment 

As ever, this highlights that timing for any investment class is key.  Buy low, sell high.

What of 2014?  With the US looking to phase back quantitative easing and with the prospect of interest rates possibly rising later in 2014/early 2015 we see that Gold again may fall. 

That said, for the brave, or for those that are pessimistic and expect a stock market correction on 2014, we see Gold prices continuing to fall initially but this may present buying opportunities.

Inflation, economic and equity market turmoil are drivers for precious metals.  If gold hits to $1,1__’s then we suggest this is a safe bet for reasonable return in 2014/2015.