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Gold gained in the first week of May when the traders received a series of positive data from the US and the Fed remained firm on keeping the rates unchanged. The employment data was more positive than expected, and gold’s resilience showed it could withstand the recent selling pressures. There were over 263,000 new jobs in the last month in the US, but the wage growth was not assertive where it is expected the low unemployment rate was conceived, mainly, as many had left the labour market. The working hours dropped and the reports on unemployment attributed to the poor reports from the service sector. Overall, the precious metal was supported by the exhausting fiscal stimulus and weaker data from the US.
One of the key figures expected to come out in the month is US inflation data where the Fed Chairman said the current circumstances is of low inflation. The Fed suspects the current situation to be a transitory factor responsible for holding inflation. Low inflation means the Fed may cut rates.
Gold remained at $1,280.30/oz in the first week of May where investors expect the rates to gain to $3,000-$4,000 an ounce in future. In India, Akshay Tritiya, in the first week of May 2019, is celebrated as the day when people buy the metal as it is auspicious to buy valuable items on this day when the value grows multifold. The yellow metal is associated with auspiciousness and is a rare metal, historically, used as a financial unit.
It does not lose quality, or structure, or decays with time. It can be bought in a number of shapes and can be made into several different types of items.
The yellow metal can be bought as a commodity where the prices bounce on a regular basis. The events like recession, military conflicts, natural disasters, structural issues with financial institutions, international trade, economic issues and other geopolitical factors influencing markets in a negative manner, support such funds.
The buyers need to look for the best price with the metal exchanges and check the policies to buy or sell.
The dealers may have different policies for buying back the metal, where they may charge a premium for buying back. In such conditions, one can buy coins to get physical units. The creditability can be assured through reliable organizations and one should check for the warning signs, where the low prices offered in physical gold should be inspected for quality.
One can buy ETFs, which provides safe alternative ways where the fees are minimal and there is plenty of liquidity in such funds.
One can buy in such commodity, by investing in mining stocks. Commodity futures can provide contracts to trade but the traders require professional skills to successfully trade in it.
Overall, there are many benefits of the metal that offers a hedge against geopolitical instability. It holds a store of value offers diversification and provides protection against falling exchange rates and inflation.
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