Dips in value, are they the Fed’s fault?
Wednesday, October 4th 2023
Gold is a unique resource. It tends to do really well when the rest of the financial world isn’t doing to well. That can be evidence by gold being over $2,000 an ounce at one point in 2020. Just because it has a history of doing well, doesn’t mean it is the perfect investment.
In 2021, the Fed has done a good amount of damage to the value of gold. It dropped from a high of $1,900 to where it is now, below $1,800 an ounce. A recent meeting with the Federal Reserve on policies caused a $100 drop in prices when it comes to gold.
According to most analysts this will remove the chance that gold
will hit another all time high by the end of 2021 like it did in 2020. This
comes in line with a 30 day down trend in gold performance. Panic sales from
gold investors this year and having seen significant price drops, have further
reduced the chances of seeing an all time high value by the end of 2021.
Gold is one of the original currencies though and in the past has suffered dips in the value. Dips in value in gold do not often last long and have always rebounded in the past. This gives investors such as gold IRA account holders reason to not doubt gold and not give up on it.
For the time being gold experts are not being bullish when it
comes to investing gold but they will be closely monitoring it to see when the
best time to become heavily involved in gold comes again. Another reason that
they give for not putting gold in the rearview mirror is the fact that
countries are still pushing stimulus funds into the markets. These are helping
to revive COVID financial depressions all over the world.
Potential rate hikes have been put on the table for 2023 based
on the current economy. That hasn’t helped the value of gold but the last
couple of COVID years have put the world in the most financially stable places.
Experts don’t think that the current instability will last and if the inflation
rates and market can stabilize by this time next year, then we should expect to
see rate hikes taken off the table.
Actions taken by the feds throughout the next year will have a
heavy impact on the future of gold and how quickly it will recover. As long as
the President carries on with his financial stimulus packages we should see
recovery in the gold market. The only real chance for a negative outcome is if
the country does not see a continuing stimulation.
Gold is commonly not the first thought of investment but it is one of the oldest resources to be used as a monetary platform. The history behind it would take a lot to overcome. We should expect to see gold start to rebound within the next year. What do you think will happen to gold? Do you see it recovering soon?
