The Historical Defensive Nature of Gold Cautions Against A hasty Response to the soaring prices of gold


If you have some money and you want to try your hand at gold buying, there is something important you should know. Buying gold bullion is nothing like dipping your toes in the proverbial gold market buy, it is a commitment and it works out better for long term investors who plan to hold on to their gold bullion. Gold has had an incredible rally since the COVID-19 outbreak, but it was already doing well.  As a precious metal commodity, gold is always testing new boundaries. When it broke through the $1,500 some people expected it to stay there but then it increased its pace and hit $1,800 and the $1,900 and $2,000. Throughout the pandemic gold investors have been seen at the bullion dealers lining up to buy gold bullion

With gold, history tends to repeat itself. In 2019, Nov 5th, gold had its biggest loss in two years as the U.S and China headed towards a trade showdown. The trade talks between these countries sent gold mining shares tumbling. An example of Gold’s defensive stance came about in response to the COVID 19 pandemic.  This is the same thing that happened during the 2008 global financial crisis when inflation soared amid uncertainty I the markets. Is investing gold a good idea now? 

Investors need to be tactical about the money they put into gold. Investors tend to be fanatical about gold and this can be a dangerous thing. This precious metal is a psychological asset and in a crisis, investors might stock up on it like they would toilet paper or to sell as much of it as possible only to find out later that they made a premature move. When buying and selling of gold is driven by sentiment rather than by the demand and supply, it can be a disadvantage to those who really need gold for useful application like in manufacturing and medicine. If the price is driven by sentiment rather than need, it can affect the price of needful things that gold is used. 

Interestingly enough, The World Gold Council reported that in the first half of the year the demand for gold has dropped to 11% year-on-year. People seem to be buying less jewellery, which has always been the industry’s biggest consumer of gold. However, the demand for other gold products has increased which has helped offset the decline in demand from other sectors.  What is becoming apparent is that the price of gold is being driven by investors. More people are taking steps to buy gold bullion Brisbane than ever before. Maybe more people are waking up to the fact that gold is the best hedge against inflation and other crises. 

At the end of 2019, economists were predicting that the price of gold would reach $2,000 only to slide down and help at $1,900. Analysts are now predicting that the next milestone for gold is at $2,300 an ounce. Prudent precious metal analysts advise caution, not exuberance. There is still a chance that you can make a lot of money if you buy gold bullion Brisbane at the right price and hold onto it for the long term. Precious metal market or capital markets can be fickle, there is no telling when things will change. So far, everyone has been speculating. With gold treading close to record-high levels, tread cautiously and only deal with reputable gold buyers.