Is Gold Still A Safe Investment For 2015?

Mon, Jun 10, 2013

short term gold investment

Investors’ love affair with gold is over.

But that doesn’t mean gold is no longer a safe investment.

is gold really a safe investmentYou see, gold’s steady decline since 2011 has been painful for a lot of latecomers to the gold boom. Worse yet, the drop has only accelerated with each step down for the price of gold.

The entire downturn has left a lot of investors wondering whether Gold Is Still A Safe Investment For 2015.

The answer is to whether it’s still safe to invest in gold depends on what point we are in the bull/bear cycle.

One indicator says the most painful part of the cycle may soon be coming to an end.

Gold Price: What it Means for Safety and Sentiment

The sentiment in gold investments can’t get much worse.

Gold prices are more than $200 so far this. Gold mining stocks are down an average of 37%.

And finally, average investors have walked away from gold. And professional investors are betting big that gold prices will continue to fall.

short term gold investment

And that’s all a good thing.

The chart below shows the level of gold shorts (bets on the price of gold going down) has surged to multi-year highs:

As you can see, the value of the bets on the price of gold are the highest they have been in years.

They’re much higher than when gold first passed $1,000 per ounce in 2007 and higher than when gold prices fell 30% in 2008.

Over the short-term, this will keep a lid on the price of gold. With so many sellers, potential buyers simply are just going to wait on the sidelines. There’s just no way to create any urgency that would propel gold prices higher in the short term.

But that doesn’t make gold a bad investment. In fact, nothing has changed about gold except the price.

Short-Term  Gold Investment Potential: Stairs and Elevators

We continue to recommend all investors own at least some gold.

So our gold investment advice remains the same in 2015 as it has been ever since the downturn in gold prices began:

If you don’t own any gold, get some. If you’re looking to really buy a lot of gold, there are likely better prices coming. Wait for them.

But for the short term, we don’t expect much action in gold.

The risks to speculate on gold price still remain extremely high and the potential rewards aren’t enough to offset the risk.

That’s why we recommend for all assets, to never “average down.” After all, the goal of investing is to buy something and sell it for a higher price. To do that an investor has to buy something that’s going up. But by buying any asset – including gold – at a lower price, investors are not buying an asset that’s going up.

So to the question whether gold is still a safe investment in 2015, we have a simple answer.

It’s still safe for long-term holders who Invest In Gold as another form of savings. For investors looking to get rich in gold, it’s still too early to expect a sharp turnaround.

Gold has lost the trust of investors. And it’s going to take months or years to get it back. But when it does inspire confidence again, gold prices will likely soar beyond their past highs. – Future Of Gold Investment In 2015

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