The falling prices of Gold globally have sent jitters among people who have been investing in Gold for a long time. There was a time when Gold was considered as a safe haven by the most novice investors. Although many views are coming up for the fall and the recovery of this precious metal the most common of them is the selling of gold by many a few European Countries like Cyprus which are undergoing an economic meltdown. Many experts feel that holding gold is no good as it is a non performing asset. Yet Gold according to US Gold Bureau is still the best form of insurance for your economic stability for the future.
There are few experts who feel that the imbalance in Gold prices is going to meet the fate of silver prices. Silver was considered as a precious metal and was hoarded by central banks all across the world a few years back but the practice was discontinued. Looking at the present scenario there are indications and signals one school of experts that Gold will soon meet the fate of silver.
The question is how genuine these claims are? Examining the factors that influence Gold prices US Gold Bureau inferred that the prices of Gold depended upon the huge amounts of Gold reserve held by central banks all across the world. According to an estimate the stockpile of Gold in central banks all across the world amounted to 33000 metric tons in 2003 which is almost 25% of all the Gold mined all across the world so far.
This amount of Gold is enough to meet the world demand of Gold for 10 years without mining a single ounce of Gold. That’s quite an imbalance created by the central banks. The gold standard fixed is an indicator of the health of a financial institution or country that holds gold in its reserves. Without this standard Gold is just another piece of metal that one possesses. Central banks will not store gold if the Gold standard is not there. Central banks in Canada have already cleared their stockpile of Gold as it was not earning any interest for them. Another glaring factor that came to light was that sixty percent of the current gold reserves are held by U.S., Germany, France, Switzerland and Italy. All countries along with Canada are not facing any major economic problems till date which indicates that Gold or no gold the economy remains unaffected.
Taking the case of countries or central banks (that are or may in future clear their stockpile of Gold) Gold will only add to their cash reserves which of course is a good indicator for their financial health. This means that Gold investment should be looked as any other commodity investment. The future prices of Gold need to be taken into consideration before investing in Gold.
However if there is a catastrophic event hitting the global financial markets then investors who hold physical gold will be the most benefitted as its going to act as an insurance for any financial calamity. Gold can also come handy in times of hyperinflation. During Hyperinflation any commodity will come handy provided the investor holds it physically. Paper money will lose its sheen and Gold will be the star in time of hyperinflation feel experts at US Gold Bureau.
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US GOLD BUREAU 