By Julien Backhaus – Wealth Protection Today (Germany) –
In the first hours of the new year, stock prices rose again. A nice feeling for all shareholders, while many other investors are envious. If you own gold, for example, you have probably been disappointed in the past weeks and months. This time is soon over.
Professionals are getting into gold
For the sake of simplicity, the commercial buyers prefer to buy term contracts, ie delivery obligations. This delivery obligation provides that the gold may be sold or sold at a higher price at a certain future date than is now the case.
That’s why they go “long” – and put on the rising price. In fact, traders buy and sell almost only futures, so they do not have to deliver gold, they are replacing papers for new papers. Nevertheless, the statistics provide a good clue as to what professionals think of the market in question. In gold, the long position is a good measure of what the “pros” are forecasting.
A second reason to buy gold, however, is much more convincing. January is traditionally the by far best month of the trading year. On average, the gold price rises by almost 3% this month. So if you buy quickly and the luck is that the month runs as average as usual, you can look forward to a rich growth. From a statistical point of view, the price will continue to rise in February. However, it is only 1% up so far.
Dollar is weaker
Finally, you have to reckon that the dollar rally will soon be over again due to the Trump victory. Economists are now predicting that the new president will not be able to lower the taxes as quickly as he promised in the election campaign after his official appearance, in just two weeks. This could disappoint the markets and even weaken the dollar if enough investors withdraw their money from the US again.
A weaker dollar, however, would cause the gold price to rise almost automatically. The yellow precious metal is regarded as a substitute currency and an escape opportunity for those who do not want to invest in foreign currencies such as the euro. Even the most recent national action in the euro zone could help the gold price again.
Euro zone helps the gold price
In Italy, the banks will be rescued. In Greece, the government continues to spend money that it does not have. In France, debt is teetering into critical levels. The danger of collapse is relatively high. This is why the euro is not an alternative for investors, as long as it is a question of protecting capital.
One last argument for the gold price is the larger crash of the price to less than 1,200 dollars / ounce. Over the many years of data that we have on gold prices, we know that a dip back under $1,000 would not make sense with any forecasting method. So you can feel assured that it will likely move up from its current price. Chart technicians expect the price to climb rapidly to over 1,300 when it rises to more than 1,250 to 1,270 dollars.
This is why the entry level is currently ideal when you are thinking about investing in gold. Just as January is the most historically strongest month, a rally could soon follow. If that happens, buy physical gold, in coins or ingots.