When should you be buying more gold?
Some people make this decision very complicated, listening to analysts on a daily basis, scrutinizing technical charts, and so on.
First off, I’m not a trader or speculator in gold. I’m an owner of gold. I buy physical gold in the form of bullion coins, and I plan to keep them indefinitely…selling them only if and when some future need arises.
As a result, I don’t stress over whether I bought a couple of coins at a price that was ten dollars more than I would have paid if I had made my purchase a day later, or before.
Sure, I would like to get the best price I can. But a few dollars isn’t going to keep me up at night.
But what does keep me up at night is the thought of missing out on a very significant jump in gold prices. I want to buy as much as I can before that happens.
Just like I did before gold rose above $1,000 an ounce.
I don’t have a crystal ball, but I do know that gold prices react to uncertainty. Gold is where people store their wealth when they just don’t know what’s going to happen next…but things are looking bad.
I believe we are at one of those times right now.
Two things are causing uncertainty in the world today.
The first is the fact that a lot of people with money are not convinced we have “turned the corner” into economic recovery. We’re certainly not seeing a recovery in Europe or in Asia, and it’s hard to argue that the US economy is in good health when we are saddled with debts in excess of $17 trillion, and the consequences of the Fed’s expansion of the money supply through quantitative easing.
Investors and high wealth individuals are starting to look at gold as a safe haven until they can get a better picture of where else they can invest their money with a reasonable amount of confidence.
The second thing causing uncertainty right now is war, and the danger of more war.
Russia’s annexation of Crimea has already happened now. Bad things that have already happened don’t cause uncertainty in the markets.
The real question here is what Russia will do next. Will Putin send his troops into other parts of the Ukraine? It’s not knowing that causes the damage. And there is huge economic damage taking place throughout Eastern Europe and the entire European Union right now simply because nobody knows how far Putin will go.
We also see “war uncertainty” in the Far East, with a potential conflict between China and Japan over the Senkaku Islands and other territories.
Not to mention ongoing worries about North Korea.
Concerns over war have a profound impact on the markets. They make investors very nervous.
And it not knowing what’s just around the next corner that worries people the most. That’s when they decide to move their money into gold.
I think gold prices will soon react to all this uncertainty, break out of the doldrums it has been in over the last two or three years, and reach new highs in its price.
That’s why I’m working to buy more gold as soon as I can.
And you might want to think about doing the same.
About the author: DH Kenrick is a student of world economics and a committed gold enthusiast. Follow me on Google+
You can also follow Owning Gold on Facebook…