Is it too late to buy Gold?

Is Gold Due for a Correction and is it a good time to buy now?

I have been recommending physical gold for the last three years to all my clients. Those who invested and took my advice are of course very pleased with their purchase. However, there are new clients coming to me know who are very anxious about the state of the world economy and the continuing uncertainty and wish to know whether it’s too late to invest in gold.

It’s a good question. Let’s take a brief look at the major moves in gold over the last 18 months or so. One of the key high points was in March 2008 when gold went over USD$1000 for the first time ever. At that point it looked as though it would continue to rise and go through the roof. However, much to the chagrin of many gold bugs, only two months later, gold was at just USD$870. And for the next five months, gold continued to drop and by October 2008 it was below USD$715.

It wasn’t until February 2009 – just under a year later, that gold managed to go above USD$1000 once again. So those who bought gold at its high in March 2008 had been kicking themselves for nearly a year. Many were very concerned that perhaps gold would never go above $1000 an ounce ever again. However, I did try to allay their fears by showing them that the world economy was far from certain and that for sure, it would come back again and show its true colours.

However, gold is not for the faint-hearted. It is not something that you can watch every day and worry about. This is not the idea of owning gold. It is largely for insurance purposes and could just make the difference between being able to pay your bills and buy food for the month if the world economy got into severe difficulties. It is always best to be prepared for the worst and then hope for the best. Because only two months after gold hit $1000 in February, it went below $880 in April. In September 2009 gold has started to rise parabolically – going over $1000 and in November to $1150 and rising…..

So should you buy now?
I advise all my clients to buy incrementally so that if you do happen to buy at the high point, you won’t feel too bad if it drops subsequently as you will still have funds to buy in the dips. However, with governments around the world buying gold, banks buying gold and more and more private individuals investing in gold, you can be sure that the price eventually will soar. It’s just a question of when. The UK has never sold so many gold coins to private individuals ever before. In the East, the public are more accustomed to buying gold. However, with Harrods offering gold to the public in the UK, the West is catching up.

If you do not have any physical gold in your portfolio I would strongly suggest that you seriously consider buying some. This is a very difficult time to decide whether to buy or wait. The price may just to up and up, or it may drop back before rising again. In my opinion, probability is on the side of it going up overall with a few small dips in between.

If you have already bought your gold, then just sit and wait!