Stop procrastinating and make sure you are well positioned to take full advantage of the strong upward trend in precious metal prices. Over the last several years there have been many false alarms about gold and silver prices breaking out of their doldrums and shooting up to new all-time highs. While you can never be certain about how high prices will go, it is not much of a stretch to say that gold may surpass $1,500 per ounce by year’s end and silver could top $23 per ounce.
Early morning world spot gold prices on July 10, 2014 were up $20 and silver was up to $20.60 per ounce. Just over a month ago (June 3, 2014), gold was selling at $1,243 per ounce. Today it is up $100 from the June 3 lows to $1,343 per ounce. Likewise, silver was under $19 per ounce and now it is closing in on $21 per ounce. There is convincing evidence that the recent surge in precious metal prices is not just a short-term development. As a smart investor, you should strongly consider increasing the amount of physical gold and silver in your total portfolio. Here is why you will do well to have at least 10 percent of your financial assets in physical precious metals.
1. Analysts are Upping Their Forecasts
Christopher Lewis, a leading precious metals technical analyst at FX Empire, is just one of many experts who are predicting higher gold prices. He believes the base has been well established and that there are buyers anxious to re-enter the precious metals market on every small dip in prices. A recent Kitco News Gold Survey also indicated bullishness among bullion dealers, investment bankers, futures traders, and technical analysts. Well known precious metals expert, Mark Leibovit, editor of the VR Gold Letter has reiterated his recommendation for gold and silver and is suggesting gold will end the year between $1,450-$1,500 per ounce and silver will end the year between $24-$25 per ounce.
2. Fed Ending QE and Equity Markets Weakening
The most recent release of the minutes released by the Fed suggests that the bond-buying program (which has been dropping by $10 billion per month since December 2013) will end by October 2014. The Fed also intends to start raising interest rates. Earnings season is in full swing and the news is not expected to be very good. Many companies are indicating that their sales are down and the stock market looks dangerously close to a retreat. Economic conditions are becoming much more favorable for investors in gold and silver bullion.
3. Gold Demand in India Expected to Increase
When the new Prime Minister of India, Narendra Modi, was elected, he promised to relax the restrictions on purchasing gold. The Indian government’s gold policy will cut duties on imports and make it easier for individuals and companies to own gold. This is yet another very bullish development for gold prices.
4. A Scary World
Tensions in the Middle-East and the Ukraine can flare-up at any time. Fear and anxiety over the fighting in Iraq, Syria and now, Israel and the terrorists based in the Gaza Strip, are only making more people seek safety by owning physical gold and silver.
5. Did You Say Inflation?
Yes, that ugly monster that reared its head back in the late 1970’s is about to make another appearance. Prices are going up and will continue to rise in the coming months. To protect against loss of purchasing power, you need to own physical precious metals.