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Investing in Gold Bullion

Investing in Gold Bullion

Investing in gold bullion, like any other investment can mean that you see price swings in the asset.  Gold does tend to be a good store of wealth, as long as you are looking for a medium to long term investment.  In the short term, the cyclical nature of the market can work against short term investors, particularly in the retail market.

Gold Price Variations Within Range

Gold tends to move up and down within certain ranges, before meeting resistance that pushes prices either up or down. Gold has recently slipped in value slightly, but it is coming off the back of a ten-week run of enhanced prices. The metal breached a key resistance level, stoking optimism about an uptick in prices. The precious metal opened down in Asian markets by 0.3 on Friday, however, it had jumped 2.5% in a day earlier in the week, the sharpest gain since June 2016, as a rout in equities sent investors rushing to safe havens.

Why Does Gold Move Within a Range?

One of the major reasons for this volatility is brokers seeking the safe haven of gold as their equity investments suffer from an uncertain economic outlook. Gold has fallen more than 10 percent from a peak in April.  Investors are switching funds from other forms of investment to the safety of the US dollar as the U.S.-China trade war unfolds against a backdrop of rising U.S. interest rates.  These rising interest rates are making dollar backed bonds seem more appealing.

But as usually happens with gold, the price levels over time. Prices have recovered from a 1-1/2-year low of $1,059.96 hit in mid-August. Analysts have suggested that part of the moving price is, propped up by limited safe-haven buying at lower levels linked to concerns over economic growth and inflationary pressure from soaring oil prices.

Retail Prices for Gold Bullion

Gold bullion on the retail market is based on these commodity market prices for the material, but the physical gold adds manufacturing costs that are not seen in trading.  These extra costs mean that gold bullion is something that will be far more suited to a long-term investment, rather than short term speculation.