Gold-Bullion.org
Gold Spot Price $1273.05 -3.50    Silver Spot Price $14.44 0.00    Platinum Spot Price $811.00 -2.00    Call Our Gold Bullion Hotline at 800-300-0715 For Live Quotes On Gold Coins And Bars - Always Free, Insured Delivery.

Gold Bullion Prices Fall As Investors Sell Heavily

Monday’s trading session saw something that has been the exception rather than the rule for the last few months – more investors were selling gold bullion than buying gold bullion. Yes, the gold spot price has been mostly falling or flat for the better part of the year, but how have gold bullion investments figured into the mix?

While investors have shed gold derivatives like pool accounts, exchange traded funds (ETFs) and gold futures contracts, savvy conservative investors have been stocking up on gold bullion bars and bullion coins like Canadian Maple Leafs and South African Krugerrands. The U.S. Mint has reported record sales figures all year, and the Royal Canadian Mint just announced that the numismatic division of its gold coin program was going to expand due to the increased demand. How, then, can gold bullion prices fall with so much demand for physical gold?

The answer lies in the volume of trading that is done via the physical gold bullion market as opposed to the derivatives market. Institutional investors, large banks and 401(k) managers rarely, if ever, invest in physical gold. It is too cumbersome and storage is too costly after vault and insurance charges. Instead, they purchase funds that represent gold.

The average household investor, on the other hand, prefers to keep the gold in his or her hands as a safety net in case our economy collapses. Bars and coins make American investors feel safe. Even though lots of bullion is being bought right now, the percentage of the gold market that is made up of gold bullion is small enough that outflows from derivatives markets overshadow any gains made because of physical buyers.  If this trend continues, gold could drop as low as $1200 before the institutions start to purchase again.

Get Your Complementary Award Winning Guides Below

 Publish Real Money Magazine

 Publish Gold Investment Magazine

 Publish IRA 401K Kit Magazine

 Real Money Magazine

Tags: , , ,

Call Our Bullion SpecialistsFree Info On Gold BarsGold Bullion IRAGold Bullion Depositories