If you have ever bought gold in the past, then there is a good chance that you are currently sitting on some profit. However, when investors purchase physical metals such as silver and gold, they also need to understand many of the risks associated with these investments. For example, the current price of this precious metal has fallen significantly over the last five years due to the massive amount of new gold that has been mined during this period.
The price is now at a point where it may be poised for a significant increase in the short term, primarily due to inflation fears and political unrest around the globe.
Here are 5 reasons why you should expect to see higher prices moving forward:
1) Gold is an excellent hedge against inflation, and the world continues to deal with low-interest rates. Even though these changes have been minimal so far, they are likely to continue due to ongoing threats from Greece and other countries in Europe. This will help push prices up over time as more investors look for ways to protect themselves from higher inflation levels.
2) Political instability is on the rise around the world. We have already seen several countries, including Greece and Spain, fall into financial crisis, which has caused their citizens to lose faith in government institutions and paper currencies such as the Euro.
3) In the United States, many individuals have been buying guns and ammunition to protect themselves from a potential collapse of society. However, if this happens, these investors will be out of luck as they do not own physical metals such as gold or silver that would allow them to purchase things if the paper currency was no longer accepted.
4) Gold is an excellent investment during times of inflation. However, it does not do well when the economy falls into deflationary periods, such as what we have seen in Japan for over twenty years.
5) The nation of China has been stockpiling gold for over ten years now, and they are likely to continue this trend. This means that demand will be increasing significantly moving forward as the country continues to grow in size.
In conclusion, there are many reasons to believe that the price of gold will continue to rise moving forward. Therefore, if you have not already done so, now may be the time to start buying physical metals such as silver and gold to protect yourself against inflation.