Everywhere you look there are gold buyers, advertising to pay cash for your gold, but the question is whether to sell your gold now or wait. Naturally, this depends upon whether the price of gold will go up or down in the future. The following are three reasons why the price is likely to drop.
Gold is selling at a high price
Although it is true that gold is well off its peak in 2011, it is still selling at a high price over the last 10 years. A gold chart shows that gold was selling at $600 an ounce back in 2006, and now, it is selling for more than double that price. It is never an easy to call a peak in any commodity, but it is more likely for gold to drop further than reach its peak again. Even if the price of gold were to go up from where it is today, the price is still good, and you stand to lose a lot of money if the price heads downward to its previous 10 year low.
Compared to platinum, gold is expensive
Platinum is more rare than gold, and it has many industrial uses. Gold, on the other hand, is sought after for its beauty. Gold can lose value simply because people lose interest in its aesthetic appeal. However, it has also been seen throughout history as a storage of value, but in modern times, there are other things that people can use to store their wealth. In short, it is easy for people to flee gold. This reduces demand and in turn reduces the price. Platinum is needed throughout the world for many applications, and because of its importance, platinum should be selling at a high price relative to gold. This is currently not true. Gold is selling at about 30 percent higher than the price of platinum. This does not bode well for the future price of gold.
Inflation doesn't seem to be on the horizon
Historically, a rise in inflation has led to an increase in gold prices. The greater the inflation is, the greater the increase in the price of gold. However, central banks around the world are not fighting inflation but are instead attempting to fend off deflation. More than a quarter of the major central banks are now offering negative interest rates. Even though the Federal Reserve has recently raised interest rates, there are indications that the single increase in rates may be the end of rate increases for a while. The U. S. economy has low growth, and there simply isn't a lot of demand for money. This hurts the long-term prospects for an increase in the price of gold.
Although no one has a crystal ball, the reasons listed above provide a good argument that the price of gold will be trending downward, so you may want to consider selling your gold today. Additional information and insights can be found at the Pinto Gold and Jewellery Buyers website.