However said, dealing with gold can be a risky venture due to the current economic situations that are volatile, it is due to this fact that people have started to increase their gold reserves and have started preparing for the worst as they expect the same scenario that transpired in 2011 to happen again, despite the fact that the possibilities that it will happen is high – when it will happen is something you cannot be too sure off – again one can never be too sure about anything these days.
The reason is due to the economic conditions that often turn around as quickly as they emerge causing a wave in the precious metal industry and those who are caught on the ‘swell’ fare far better than those caught under the wave which eventually crashes on them. The gold buyers Gold Coast in Australia have had their fair share of good and bad experiences with gold. For instance in 2011 when prices just started rising several people started selling their gold and the Gold Buyers Gold Coast were on a buying frenzy, they were still buying gold when prices were above 1,500 and when prices hit 1,600 they slowed down their buying as they were worried that the prices may not sustain, eventually the prices hit 1,700 and several were still buying and at about that time people also stopped selling and those who bought gold for around 1500 dollars per troy ounce were pretty sure that they were in the safe zone, until prices started diving, the problem was… nobody wanted to buy gold causing the prices to plunge even further until it hit 1,200. The only option that these gold dealers had when that happened was to buy more gold to bring the average price of their stock down, however after losing close to 300 – 400 dollars on every ounce, it was a losing battle and most have yet to recover from the onslaught. On the other hand, those who sold their gold at the height of the price climb made hefty profits and when prices dropped again, they were easily able to buy back their gold at much lower prices.
The actual value of gold (real value) could be said to be at the prices that they are at now, and they will remain so until an ugly monster rears its head from the murky waters of the global economy, when the prices of precious metals rise again. This cycle usually goes on until resistance is met (supply and demand) as in 2011 strong resistance was met at 1700 stemming from buyers who believed it was too high to buy turning the wave around, however most of the damage had already been done and some came out on top, while others went under. Coming back to ‘risks’, gold is by no means a commodity that should be treated like most other commodities, the precious metal market reacts differently to different economic conditions and as such it is better to purchase gold or gold related stock as insurance more than anything else, just in case the economy falters again, you would certainly have successfully retained your purchasing power. Physical gold however would certainly be the best option, as it would certainly be easier to trade something that is in your hand than dealing with something that you are not in possession of.