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What to do when gold falls in value
Recent weeks have brought a great deal of volatility to the gold price.
With the Euro seemingly disintigrating in front of our eyes, the investment community have been hanging onto every news headline and economic data release. The hope is to avoid huge losses by staying ahead of the game and shifting money around to avoid catastrophe. Clearly it’s human nature to want to time everything to perfection to avoid any losses at all and maximise any gains. Unfortunately in reality, without the use of a crystal ball, perfect timing is impossible.
The same goes for timing it just right when investing into physical gold. The fundamental economic and political backdrop which has pushed gold prices to record highs remains in place so the medium term outlook for gold is upwards. However, there’s no denying that the path to new highs will be a volatile one. There will be times when gold falls in value. So what can we do to ride out some of this volatility while still protecting ourselves against the economic depression with physical gold?
One great method in these times is to buy small amounts of gold on a regular basis – smoothing out any price volatility along the way. We offer our clients the ability to fix a Sterling amount each month which they wish to invest into gold with our Monthly Saver.
This is proving very popular right now as investors receive more gold for their money in a month where gold prices have come down while not losing sight of the overall strategy of steady accumulation in an asset which looks set to rise in value over the medium term.
It also provides a great alternative to simply putting a few hundred quid away each month into a savings account or ISA. Interest rates on those accounts are below inflation levels so your money is actually losing value in real terms. Meanwhile we all know that while savings are held in Sterling, its all too easy to dip into them and spend any money accumulated. While gold coins are extremely liquid, it is far easier to leave your accumulting savings well alone, allowing them to grow from month to month.
If you opt for UK gold coins, you will also have the advantage that any gains in your GAA will be Capital Gains Tax free so it really is an alternative to an ISA, while also hedging against a falling Pound.
So if you’re concerned about how to avoid the economic meltdown we read about on a daily basis but you’re unsure about timing, drip feeding your money into physical gold can be a prudent method of protection. Remember the saying that applies to so many facets in life – “If you fail to prepare, prepare to fail”, and failing to prepare for the Euro collapsing could spell the end of any wealth you’ve carefully built over the years. Learn to capitalise ever when gold falls in value.