People have naturally always had a fascination with gold because of its inherent value. Investing in the yellow metal is something that a lot look at as a way to safeguard against potential financial ruin in the future.
However, as with all types of investments, lack of adequate knowledge and proper guidance may very well lead you to the same crisis you were trying to avoid. Studying the market and learning about the gold price forecast its ups and downs is fundamentally essential as is learning the lessons of past gold price activity.
Never Ignore History
Activity in the markets has been proven time and again to be cyclical. Never allow yourself to get comfortable regardless of what the forecasts look like, as some like to say everything eventually comes down. The evidence is there to see for everyone; gold has had a storied history over the decades experiencing some impressive rises that were expectedly followed by massive sell-offs such as 1915 to 1920, 1941, 1947, 1951 to 1966, 1974 to 1976, 1981, 1983 to 1985, 1987 to 2000 and 2008. Expect the unexpected, since stability or an uptrend in prices, may just be signalling the next big fall.
Learn What Affects Prices
Becoming an intelligent investor who can determine the gold price forecast requires a lot of things such as time, the right guidance, and a lot of studies. This practice is what differentiates between those who become seasoned professionals and those who remain amateurs. The experience will tell you that common events that everybody is aware of aren’t going to cause massive price shifts; however, the unknown and unexpected will certainly do just that. Simply knowing that will prove invaluable in making better decisions.
Fluctuations Are to be Expected
September 2011 saw prices peaking and hitting record highs of $1900 an ounce. In the two years after, however, with fears of a global economic slowdown that were gripping the nation, prices went spiraling down again to just below $1400 by April 2014. This change was just a typical example of the price activity in the gold industry that has seen its fair share of rises and falls over the decade.
Be Wary of Popular Opinion
Inevitably, spreading stories of great things to expect is a huge part of the sales narrative. Back in 2007-2008, the environment was perfect for the gold narrative even though it had broken out in 2005. During the housing crisis, the narrative got even better, and investors were balled over by the emotion of it all as people seek ways to guard themselves against impending doom. Forecasts on g
old prices were insanely attractive, which led many down the rabbit hole of emotional investing. It is often said that when people begin talking about an event, the bubble is about to burst.
The Bottom Line
The markets are never for the faint of heart. With all the variations, fluctuations, and occasional unexpected massive shifts in one direction or another, being prepared for all eventualities is a prerequisite. Gold is certainly a very safe bet when considering value-retention in the long term as compared to other assets, regardless of the continuous fluctuations that come with the investment. And with only a finite amount of the yellow metal available on our planet, you can be confident about keeping your gold.