Gold News

The fear factor

In these articles we have looked at gold without discussing when to buy and sell.

In the last five years $100,000 has lost $60,000 of its gold-purchasing power.  It takes real conviction to buy gold against that backdrop, and most people won't do it because they fear that they have already missed it, and that what went up must now surely come down.

Markets generally make action difficult, whether through fast moving prices which can easily induce paralysis, or through dull times, when it seems like there will be plenty of opportunity next month.

The decision is made harder still by price 'noise'.  Week by week the world's money sloshes about, from country to country, and market to market, with greater ease than ever before.  Gold is swept along, showing first a spectacular gain, then a sharp loss, as the odd billion or two of modern hedge fund money switches in, and then out again.  For most of us this volatility is a cause of anxiety. 

At BullionVault we believe the short term future of the gold price is nearly random.  We get hit as badly as anyone else by re-stocking gold a few dollars too high, and then distributing it at a small loss.  Equally we are sometimes lucky, and re-stock just before the price advances, so fortunately that side of our business tends to balance out in the long term.

But underneath this short term noise we believe we see a solid longer term trend well founded on the history and economic reasoning we have tried to lay down in this book.

Fear is rational, and it's something which successful investors learn to manage.  We hope that we have at least encouraged you to think critically about currencies, bonds, and their exotic derivatives too.  If you are anything like us you will probably now fear them as much if not more than gold.  But even if your solution is not gold we thank you for reading our 'Case', and however you choose to take it from here we sincerely wish you every good fortune. 

Paul Tustain
July 2006