-- Posted Wednesday, 7 August 2013 | | Disqus

Usually the autumn is a strong period for precious metal prices but not if financial markets crash and burn as they last did in 2008. This is the fear now haunting the gold market on its down days.

It makes two huge assumptions: first that global financial markets will tank; second that gold will not only follow them down but fall even harder.

Financial crash?

The first we have to concede as a real possibility, maybe more probable than not for this autumn. On the second we are doubtful. Gold has already just seen a worse correction than in 2008-9, why should it have another one?

Besides to hit the $1,000 mark gold would need to be hit hard again. It was very different in 2008-9. Then gold went into the blitz with its price as high as any other asset class, and suffered just as much.

However, gold and silver were the first asset classes to recover from the Great Recession and showed the biggest price gains until their recent correction downwards.

Surely to establish what might happen in a crash this autumn you need to think more widely about past crashes and not just focus myopically on the last event. Gold has mainly benefited from past bond market crashes, for example.

What if we get a bond market crisis mixed up with an equity slump this time around. That’s not 2008-9 all over again. It is a different ball game which will have a different outcome. Gold and silver prices might just dip slightly in the initial sell-off and then catch everybody unaware with a huge upturn.

Volatility and inflation

Volatility is what comes next in financial markets and that makes trading them even more difficult than reading them right. There are of course other fundamental reasons for thinking a further extension of the gold correction is unlikely.

ArabianMoney has detailed them before. There’s the Comex futures exchange running out of gold to cover its trade because buyers are taking delivery. There’s China buying up every spare bar that it can get at current prices (click here). There’s the coming revelation about Chinese central bank gold buying (click here).

And last but not least there is inflation. ArabianMoney can see grocery prices moving up all over the world as we travel this summer. It is finally happening, and what do you buy to protect against inflation? Gold and silver!

So what’s our hottest advice for investing in gold and silver for maximum gain? You will need to sign-up to our monthly investment newsletter for that information (click here).

-- Posted Wednesday, 7 August 2013 | Digg This Article

About Peter Cooper:
Oxford University educated financial journalist Peter Cooper found himself made redundant by Emap plc in London in the mid-1990s and decided to rebuild his career in Dubai as launch editor of the pioneering magazine Gulf Business. He returned briefly to London in 1999 to complete his first book, a history of the Bovis construction group.

Then in 2000 he went back to Dubai to become an Internet entrepreneur, just as the dot-com market crashed. But he stumbled across the opportunity to become a partner in www.ameinfo.com, which later became the Middle East's leading English language business news website.

Over the course of the next seven years he had a ringside seat as editor-in-chief writing about the remarkable transformation of Dubai into a global business and financial hub city. At the same time www.ameinfo.com prospered and was sold in 2006 to Emap plc for $27 million, completing the career circle back to where it began a decade earlier.

He remains a lively commentator and columnist as a freelance journalist based in Dubai and travels extensively each summer with his wife Svetlana. His financial blog www.arabianmoney.net is attracting increasing attention with its focus on investment in gold and silver as a means of prospering during a time of great consumer price inflation and asset price deflation.

Order my book online from this link

© 1995 - 2019

Live GoldSeek Visitor Map | Disclaimer