Since years we can read in every investment magazine that we shall now invest in gold and jump on the upcoming trend. Putting gold and silver-ingots into your bank or private safe was or is since a long time the top-notch advice of every investment adviser. So let’s check the development of gold and silver prices in the last years by checking their price charts.
To understand the gold and silver prices we have to look at the underlying of this prices which are the gold and silver futures traded on the CME in Chicago.
Let’s look at a long term chart of gold in the chart below, from 2006 long before the Lehman Brothers insolvency the gold price was rallying upwards with a minor correction in 2008 and the peak in 2011 at a price of more then 1900USD per ounce. Since 2011 the trend in gold pointed downwards until late 2015, what we saw in 2016 was a correction in all indexes leading to fear in the lines of the investors and pushed gold from the low in 2015 of ~1080USD to a level of 1300 USD up.
The silver chart below shows a similar movement as in the gold future but with stronger corrections and more weakness in the rally of 2016.
What we can see in both charts is not an asset for long-term investment, it shows that the so called safe-habour investment which was highly praised for years also cannot provide long-term stability. Personally I only trade gold and silver in my trading accounts as a swing trade over a timeframe of some weeks or a few months to make profit of movements in short to mid-term timeframes. What I do as precious metal investments is investing in collector coins which could also sometimes be made out of gold, silver or other precious metals but one important thing for me is the limited availability of this colloctors coins. I will put up a showcase of my precious metal investments in one of my next posts. If you are interested in further specific things about this topic or about precious metal investments in specific please write a comment and let me know.
- free charts available on stockcharts.com