Gold Is Still Good

By JacquelineBrewster

We knew we were in a bull market for gold, but investors suddenly dumped gold for cash in September this year. Gold fell a sharp 16% only to rise again afterwards. While this situation made investors nervous, analysts see data differently. Basically, they say a downwards correction was due at some point, after the constant rise of gold since 2008. Many of them agree that the fall was lesser than expected.

The situation was described as bearing similarities to the one in 2008, when gold lost around 30%. Investors remember that to be the roughest downwards correction known in the market. What analysts have to add to that is that all other assets fell much more at the time. Also, gold has soon resumed its rise, ending the year with an approximate rise of 5%.The bigger picture shows gold constantly rising since February 2001, with a 2008 decline ending on an up-note. In fact, gold rose 170% in only 3 years, since 2008.

Despite the cry wolf voices that already advertise a bubble, and the general volatility of markets in today’s uncertain environment, the level of volatility that the gold market shows now is significantly lesser than that it showed in the last known bull market for gold – the seventies, before a bubble occurred. In the seventies, gold price fell with around 50% before starting to increase again, a growth that lead then to record prices. This variation occurred in 1974. Many grew anxious after that abrupt decline. Quite some of the investors watched the premise of bull market with disbelief and ceased to invest in gold, only to miss the truly rewarding moments that followed when gold attained a record price.

Analysts say gold is near a normal high area within a major uptrend now. Explosive action is expected to occur only after this period of weakness, which is prone to pass. Gold is considered to be capable of a further decline in the following months, but this is not viewed as a good reason for further worries. A decline that is stronger than 50% would give enough reasons to debate whether the bull phase of the market was over, but 16% is not enough for that.

In conclusion, this moment of decline in the price of gold is considered to be a healthy manifestation in the gold market. Investors are advised to make gradual purchases during the next two months, which will help them obtain a good average price. The gold market is a bull market for now and it will remain in this phase for a while. Investors are advised to consider methods of accumulation. So, this is also a very good time to invest in gold funds, which are virtually risk free.

Article Source: http://interpret.zar.vg

About The Author
The Hinde Capital gold funds offer investors the opportunity to seek the preservation of capital in gold, against the potential erosion of the purchasing power of fiat paper money.