Why experts say the metal is still a good investment
Gold’s glimmer is gone, said the Wall Street Journal—this is currently reflected in the state of mutual funds that invest in gold miners. Gold has suffered a plunge this year, and investors are on tenterhooks on whether to dispose or retain investments backed by the precious metal. First Eagle Gold Fund’s Matthew McLennan stated that a “potential hedge has derated”, but continues to argue that investing in the commodity is still important. An eventual Federal Reserve tapering will have an impact on gold prices, and gold’s volatility may continue in the meantime.
Despite the downtrend that the metal is experiencing at this time, why do experts have the opinion that it’s still a wise investment? An article in Money Morning is of the view that gold investments will again shine. As of the moment, the commodity is “going through a correction”, like what happens at the end of a price bubble. Eventually, gold will make a comeback, and will yield great returns if bought for the long term. Contrarian investing will prove that patient investors who remain faithful to the metal will be rewarded, and its true value lies in investment portfolio protection.
Where does gold stand now? Recent reports in Market Watch revealed that gold scored a gain for the second time in a row. This rise, according to chief market analyst Chintan Karnani, came from “short covering before the Fed meeting” as well as the easy-money policies of the European Central Bank. The same article quoted Bullion Vault’s head researcher Adrian Ash who said that these levels could encourage “more bullish trading as the New Year begins”. The two risks to gold’s stability, he continued, are Fed Reserve’s bond-buying program and the low trading values of all markets during the Christmas season. Still, with market prices moving rapidly, investors are advised to be cautious about making the next move where gold investments are at stake.