Historically, gold has been a  safe investment for those lucky enough to possess it. In the modern era, the value of gold has experienced a few peaks and valleys, but continues to trend upwards. While it is impossible to predict with 100% certainty how much an ounce of gold will be worth in the near or long-term future, you can get a good idea where the price is heading based on events that usually affect the price of gold.

Stock Market Surge

Most of the time, when stocks go up, gold goes down. This happens because a stock market surge can lead to large returns, while gold has historically made gains slowly. When the market, as a whole, starts to rise, investors stop trying to buy gold and unload what they already have, which leads to an oversupply of the commodity and a dwindling number of investors who want to purchase it. Even when the value of gold drops, it generally will not do so drastically, unlike a stock which might lose a significant percentage of its value overnight if the company receives bad news.

Recession and Depression

Gold is seen as a safe haven for investors when other investments (primarily stocks) are sliding. As opposed to a surging stock market, investors want to jump into gold during a downturn, driving the price up and keeping it fairly steady once the initial rush into the metal evens out. This causes the value of gold to rise, usually for the duration of the recession/depression.

Foreign Actions

Sovereign actors buying or selling physical bullion can strongly affect the spot price of gold since they usually invest or divest of a lot of it in a short period of time. Even if they try to spread out their purchase or sale over a period of several months, you can usually expect to see a sharp reaction to the initial announcement.  

Getting the highest price out of your physical gold is essential for getting the best return on your investment. If you are interested in selling your gold coins, jewelry or bullion, give Ralph Mueller & Associates a call at 480-949-9299 or fill out the Contact Us form on their website.