Is It Time To Buy Gold?

While it is common wisdom that gold and other precious metals are a safe investment during times of economic uncertainty, many investors are currently wondering whether or not now is the correct time to by gold. While economic uncertainty and fear certainly abound, inflation adjusted all time highs in the gold market have left many investors concerned about a possible impending decline in gold prices.

Historic Trends

While the decision to buy gold has always been the default option for conservative investors during times of uncertainty, more savvy investors usually choose currency as a preferred safe-haven, often investing in the stability of the American Dollar or Euro. However, debt crises in the United States economy and Europe have created a problem for investors. Which currency will implode sooner? For now it appears the Euro is doomed sooner than the dollar and investors are stampeding to the greenback. This presents a buying opportunity in gold.

Current Trends

One of the more difficult transitions for modern investors to make is the paradigm shift away from the historic strength of the European and American markets. While both , neither market is as influential as it once was. Additionally, until the United States regains it previously AAA+ credit rating, and until the Eurozone works out the impending crisis headlined by the Greek credit meltdown, neither looks to regain any of its previous luster. The vacuum left behind by the decline of these previous powerhouses has been quietly filled by China.

Whether or not China is a fair predictor of future trends may be a subject of some debate, it’s undeniably a complete economic powerhouse, possibly, in light of their continued purchasing of United States debt, the only true economic superpower at this time. Regardless, China has decided to buy gold, and the world should take note. China has been the second largest source of private gold demand, second behind only India. Additionally, China recently unveiled public gold vending machines, which, while slightly strange, is a strong indication of how the Chinese view purchasing gold.

At the end of the day, as long as economic fear abounds, and as long as developing markets view gold as a quality investment, gold prices will continue to rise, or at least hold steady. While gold might not be the best option for wealth growing, it has always been, and will continue to be, a vehicle for wealth storage, making the decision to buy gold a relatively simple one.