Gold is a required part of today’s economic survival kit. The Britsh Pound has dropped in value, the markets have been in turmoil. Stocks have lost close to 50 percent of their value. The only market that has not been decimated by the recent economic downturn is gold. Recently, radio, television, and print advertisements for buying gold have gone up.
According to some, this signifies that the ‘gold boom’ is about to go bust. Perhaps it is time to think of selling gold.
Gold is sold like any other commodity. The prices are dictated not just by supply and demand, but by speculation. Speculation can drive prices far higher than the actual value of the commodity, and gold is no exception to this. While gold is often considered a sure bet to hedge against inflation, it tends to attract emotional, speculative investors who can amplify price gyrations.
UK-based silver and gold producer Fresnillo Plc has reported some staggering 13.3% decline in profit over the first half of 2009. Jaime Lomelin, Chief Executive Officer of Fresnillo, said, "The first half of 2009 has been challenging for all natural resources companies, with the prices of many commodities including silver suffering significant falls when compared with H1 2008." While he is hopeful that the last half will look more profitable, it is up to debate as to how much is price driven and how much is due to "reductions in costs across our operations."
There are even warning signs being reported in the United States. The Wall Street Journal has reported,
“Financial advisers also warn that since gold is considered a haven in times of crisis -- and is less in demand for practical uses than other commodities such as copper and oil." Randy Carver, president of Carver Financial Services in Mentor, Ohio stated that Gold, "is too narrow, it's too volatile, and historically it hasn't made that much money for people."
That is the key, it is emotional, and can be manipulated by speculative investors. People that watch the markets, look at all the adds telling people to buy gold. They point out that the same groups are selling gold. This is a classical pattern that is called ‘pump and dump’. They pump a product, knowing that the prices may be unsustainable. They point to the past increases and tell people to buy. What they don’t tell you is that they are selling gold to you, from their own reserves.
If gold were due to go up so much more, why would these major investing houses be selling gold? Because the market may not hold the highs that it has attained. Gold is only valuable if it is sold. Unlike some investments, gold does not pay dividend. It is only a money maker when selling gold. Many are urging people to start selling gold. Selling gold now may be a good way to cash in on the all time highs that we are seeing now. By selling gold now, you can invest that money into something that does generate a stream of revenue. Selling gold could allow you to pay off a bill, or just to have the money for a vacation.
Gold is everywhere, it is not as rare as most people are led to believe. Look in your jewellery box. While you may not realize it, but by selling gold jewellery that you no longer use, you can capitalize on the high price. Gold coins and jewellery are great items when it comes to selling gold. Coins are often easily accepted while jewellery may very depending on the purity of the gold.
Go online, check the paper. You will find people willing to buy gold in this market. Now is the time to consider selling gold. Maximize your potential money, and reinvest in something that provides more stability. If you are sitting on gold, selling gold now will allow you to capture historic prices. It will do you no good to try to sell gold, once the prices start to fall. Looking at a pretty piece of jewellery or coin may make you feel good, but unless it is sold, it does nothing for your financial future. Selling gold, it is starting to make more and more sense.
