The first week of April 2013 (April 1-5) saw on a 10 month low for gold prices.
However, the week started off strong. On Monday, April 1, the precious metal ended up $2 on the day, pushing the price per ounce above the $1,600 mark. Many people use the $1,600 number as a psychological benchmark; if gold drops below that number, some people often start to panic.
Tuesday, April 2, saw a bit of decline, with gold closing out the day at $1,597, which was a slight, but psychologically significant loss. However, things took a more negative turn on Wednesday, when word got out that the Federal Open Market Committee could start to taper off its quantitative easing program this summer. This led to some market uncertainty, as the program is responsible for sending $85 billion each month in Treasury and mortgage bonds into the US economy.
As you’d expect, this type of news caused the market to decline, and gold was no exception. Gold’s price dropped at one point in the day to $1,539 an ounce, but rebounded a bit in the afternoon and ended the day at $1,553, which was the lowest it’s been in 10 months. Silver was also affected by the news, dropping to below $27 an ounce.
The Nasdaq, Dow, and S&P 500 all experienced losses on Wednesday as well.
However, despite the negative economic news and the resulting declines in stocks and the price of gold (and silver), it is still important to see and seize opportunity when it comes. A decline in the price of gold means that you can purchase the metal for less money than you would have spent 2 weeks ago. The same goes for silver.
Investing in precious metals continues to be a recommendation by most financial experts. Of course, there are some who claim that the recent gold decline spells certain doom for the precious metal and people who own it, but all investments have periods of decline and uncertainty. You must be mentally and emotionally strong enough to get through it.
We cannot tell you how gold will perform in the future, but we can look at history and see that the precious metal, like all top performing long term investments, has overcome setbacks in the past, and seen record gains time and time again.
Investing in gold has many benefits, and a reduced price only adds value to your investment in the long run.