Since December 7th, gold prices seem to have been spluttering up and down, with a bit of a downward trend.
Buyers with a delicate constitution might be fretting right now, and biting their fingernails.
But they shouldn’t be.
Gold has had another stellar performance this year, increasing in value by 27%. Do you have any stock or bond investments that have delivered growth even approaching that level?
This is also the 10th year running that gold has increased in value.
Those who fret and worry about every pause or correction in this upward trend suffer from a kind of short-term anxiety syndrome. Just because of a small correction, they get tied up in knots and wonder if they should sell.
But the thing is, all the fundamentals are still in place for an ongoing rise in gold’s price.
The U.S. dollar is under pressure, which is good for gold prices (although bad for a lot of other reasons). The Euro is under pressure, which is also good for gold prices (and again, bad for other reasons.)
In fact, if you want to fret and worry about something, worry about the reasons behind gold’s rise in price over the last ten years.
Rising gold prices are a pretty good indicator of weakness in the economy as a whole, nationally and internationally.
For as long as those economic fundamentals remain weak and under pressure, the price of gold will tend to rise.
In fact, that’s the whole point of owning gold. It protects a portion of your wealth during times when the economy is going south. In that regard, be careful what you wish for. Good news for gold prices usually means bad news elsewhere.
But as the weeks and months ahead unfold, don’t be distracted by dips and corrections in the price of gold.
For as long as the world’s economies continue to struggle, the trend in gold prices will almost certainly be upward.