The Mechanics Of The Precious Metals Market

Gold is most certainly one of the more popular investment vectors that investors utilize to hedge themselves against inflation and other financial uncertainties. The reason that the precious metals industry is considered to be a safe haven is due to the fact that it provides an avenue for investors to effectively mitigate risk by diversifying their investment portfolios with precious metals.

The Mechanics Of The Precious Metals Market

However, it is important to know that there are a variety of financial instruments that are related to precious metals that range from good delivery bars right up mining stock options, most of which are reliable, but there are some of those that are being invented by innovative financial experts that may not be a very good thing. The main reason for this is that these financial experts have done nothing but flooded the market with a diverse range of investment tools that do not link the investor with any ‘actual precious metals’, and it does seem that most of these investment tools are associated with nothing but gold that does not exist or in other words, virtual gold.

Forecasting or predicting the volatile markets, these days is similar to gambling as a high-frequency machine driven markets are manipulated regularly, which renders fundamental analysis ‘almost’ useless, we know this when we look at the different bull rides and bear rides that many precious metals markets have been through over time. At the height of it all and to complicate matters further, the obsession held by a significantly large number of investors with Fed policy dominates not only the precious metals markets, but all markets.

The funniest thing is that the Feds have been doing more harm to the economy than good, yet people are still fixated with what they have to say and what they are going to do when they plan the economy. However, there is still hope within the confines of the precious metals markets as despite the artificial influences and the avalanche of leveraged paper, the mechanics of the precious metals market still churn against the odds and they will reflect the actual supply and demand which gives us a pinhole glimpse of what is happening and react accordingly.

Basically what an investor really has to know are 3 things and they are, the fact that the precious metals industry is manipulated, fundamentals have become illogical and practically mean nothing and lastly – The Feds do have an extensive grip on the market. One effective way to gauge the markets and be on top of things is not to look at the precious metals markets themselves, but instead look at everything else around it, when prices of basic goods and necessities start going up, gold buyers should lean towards preferably physical gold bullion and when prices are easing and inflation is not in sight, it’s time to sell and invest in other things.

Where the market is heading, well based on ‘real value’ estimates, the future of the precious metals industry is definitely up.

For more information, please visit the Brisbane Gold Buyers website.

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