Gold Falls to 4 Year Lows

Gold prices fell last week to under $1200 per ounce for the first time in 4 years, with some investment funds that back gold seeing falls of over 50% in value from the peak gold prices as a consequence.

For many investors this now leaves a conundrum of whether to hold onto their gold in the hope it will reverse it’s losses and turn upwards again, or to sell in order to avoid more falls if the trend continues.

Of course the performance of gold has had more to do with the Federal Reserve and their plans regarding the future of quantitative easing than any doubts about the metal itself, but it does beg the question as to whether gold remains a good investment or should be avoided.

While it is impossible to predict the future price of any share or commodity, the economy is still in a perilous state worldwide, and with the risk of rising inflation (which could catch up with us suddenly and be explosive in nature), then gold would look to be a good hedge against future increases in inflation, or future deterioration of the economy.

Whether you should invest in gold is down to your outlook on where the financial state of the world goes next, but with little good news on the horizon on this front, it could well be that gold is now at a good level for buying, in fact it may be the best opportunity to buy gold that we’ve seen in those last 4 years.

 

 

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