December 4, 2022

Moo Trade

Finance Blog

Precious Metals Market’s Growth Potential

The price of gold has been moving in a positive direction for the past 5 years with 2019 to 2020 being the most exciting period. During the 2019 summer, gold broke out above $1,360.00. The price of gold went up to $2,067.15 on the 07th of August 2020. This happened during the early months of a pandemic. The highest price of gold previously recorded was $1,928 on the 6th of September 2011.

Since the beginning of the pandemic, gold has been on an up-trend. It has had its high highs and low lows. The precious metals markets have seen a lot of action in this period and a notable interest was shown by individuals more than central banks. Gold is still in a bull market which is always marked by high prices. To try and understand whether you should buy or sell bullion, we might have to look at the previous bull markets that gold has been through.

Between 1971 to 1980, the gold price soared from $35 to $850 an ounce. This was a momentous climb over a short period. So, what brought this on?

  • The end of the gold standard
  • The rush towards a safe haven as the economy was moving towards the inflation
  • Rising oil prices
  • A weakening dollar
  • Political instability

How much of that has changed? 9 years later, the price of gold moved to $1,920 from $250. That was an incredible 600% increase in just under a decade. Even though the gain came after gold had dropped from $850 to $250, the price was still 10 x more than it had been a decade earlier. There was an overall 40% increase in the price of gold from 2016 to date. Currently, we have been experiencing a bull market for gold. This has been the case for nearly five years. After all that time, it doesn’t seem like the market is going to change soon.

The factors that caused the price of gold to soar in the 1970s can still be seen today and they may actually be worse than before or more complicated. This means gold and silver are needed as security now more than ever. As political, economic situations across the globe worsen the demand for safe-haven investments continues to go up. Based on previous bull markets we can extrapolate that there are still a couple of years remaining for precious metal prices to make higher returns. It is s a great time for anyone to sell bullion.

Some of the factors that might spur the price of gold include:

  • Record levels of government debt
  • Dropping interest rate
  • Global political unrest
  • A global accelerated de-dollarisation movement
  • Slow economic growth

These factors have prevailed for decades and have proven to be reliable indicators of where the gold price is likely to go. When you are wondering what the best time then you should look at what is happening and which factors are at play.

The Bottom Line is that the precious market is experiencing a perfect storm for a price increase. Whether you want to buy or sell bullion this may just be the perfect time for you to do so. Te price of gold is just right for you to get a decent amount for your bullion if you decide to sell. The price of gold is still set to grow in the next couple of months mostly because most of the factors that affect the price of gold are still at play. 2019 – 2020 was a good time for gold but things may have fizzled out in 2021 however there is still a reckoning that needs to happen in the next coming years as the total results of all that has happened and is still happening come to bear. There might be some surprises up ahead.