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The stunning performance of gold in January of this year has proven that the way to make money and hedge risk is to invest in gold coins in 2012.

February 3, 2012 – The stunning performance of gold in January of this year has proven that the way to make money and hedge risk is to invest in gold coins in 2012. Fresh from the heels of a December correction that brought the price of gold into the $1,500 range, the price of gold has rebounded 15 percent from its December lows. Due to the market fundamentals that have guided the precious metals higher for a decade, it was clear that the correction was merely a temporary price shift lower and was, in fact, a buying opportunity.

That has turned out to be precisely the case. A 15 percent yield for less than a month’s investment is a pretty good return. Also, this mirrors particular situations we’ve seen in the recent past. During the September correction that brought the price of gold down from its all-time nominal high of $1,923 an ounce in late August and early September of 2011, central banks around the world swooped in and bought gold at 40-year highs. The price of gold had only drifted to between $1,650 and $1,750, but central banks were buying at rates not seen since 1971 and the end of Bretton Woods.

We’re seeing the same dynamics now as the market rebounded with a bang from a New Year’s rally that extended into a full-on bull market rampage that saw the price of gold breaking through the key 200 day moving average without so much as a blink. The breach of that key technical indicator in the month of January means gold has entered a new phase in its market growth that breaks, in some ways, free from the constrains of the previous two corrections. We will be seeing new territory in gold in 2012, in other words.

In addition, there are several fundamental indicators that show the price of gold extended its long-term bull market for many months to come. The declaration by the Federal Reserve’s Federal Open Markets Committee that interest rates will remain low through the end of 2014 is a very good example of the fundamentals lining up for the gold market to grow and prosper through the coming months. When the announcement was made, the spot price rose $40 in twenty minutes. That is a pretty good indicator of where the price is going in the next two years. Gold coins are the primary way to get a piece of the action and, as the US Mint is itself breaking records for the most popular gold coin on the planet, now is a good time to get in and watch the action over the coming months.

Kevin Johnson

Senior Staff Writer – GoldCoin.net

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