Should I dump my gold? Many investors are asking themselves this question, considering the current bearish market outlook for gold. Although the gold metal trade is in a range-bound territory, some investors think that the market will remain bearish. On the other hand, other investors believe that silver will follow expected gains in the gold price and are bullish about the outlook for the first quarter of 2022.
Gold traded at lower levels this week because the dollar strengthened. The strengthening of the US dollar is because of better-than-expected employment data. Bond yields also increased on the back of the testimonies last week by the US Federal Reserve Chair Jerome Powell and US Secretary of the Treasury Janet Yellen.
Precious metals came under pressure because of weaker demand and the fear that the economies will further shrink as fear grips the world because of the Omnicron virus. In the light of the above, gold bullion seems to be a good sell for the immediate short term.
Other considerations favor the bullish sentiment by other investors and analysts. Firstly, they believe that the Omnicron virus will not impact the economies to the same measure seen in the last two years.
Due to increased economic activity, they believe there will be greater demand for gold bullion in the jewelry industry, especially with the upcoming new-year festivals in China. Secondly, analysts believe that the market in the 2nd most populous country in the world will increase because of post-pandemic recovery in Indian jewelry and gold bullion demand.
Thirdly, investors and analysts believe that the drive towards new technologies will underpin gold as investors look to silver. The demand for electrical vehicles will put pressure on battery manufacturing and increase the demand for silver.
An increase in 5G technologies and government policies to pursue green infrastructure development will further increase the demand for silver. Some analysts believe that the demand for silver will outstrip production late in the first quarter.
It is now a good time to buy gold bullion at a low price. You can then resell the gold later when the demand for the gold bullion increases. Since a short-term economic recovery is on the cards for the economy, they believe that the gold price will strengthen and that silver will follow suit.
The markets are unpredictable and no one knows what they will do. If you want to buy gold bullion, you must do proper research before acting. Should you decide to buy gold bullion, many online dealerships can assist you in making the best choice when you buy gold bullion.
Some wise men cautioned that you should not keep all your eggs in one basket. In the novel “Don Quixote”, they used the proverb for the first time, stating: “It is the part of a wise man to keep himself today for tomorrow, and not venture all his eggs in one basket.” Diversification of your investment portfolio should include some gold bullion depending on your long-term and short-term investment goals.