Gold prices are primarily impacted by global supply and demand. In recent times, supply has been declining while demand has been increasing. The result has been a steady upward trend in the market price for gold. Currently, the price of gold is above $1,700/ounce. Just one year ago, it was approximately just over a $1,300/ounce. Five years ago it was $600/ounce. Obviously, those who purchased gold in 2006 have realized a very-significant profit on their investments.
While no one can give a guarantee that gold prices will continue escalating at this rate, many analysts believe that it will. In fact, many very well-known and highly respected analysts are forecasting that gold will reach $2,000/ounce or higher during 2012. Their reasons are twofold. First, new mines will not contribute much to the supply, as it generally takes 5-7 years to reach a high rate of production. Second, with the world in financial disarray, many financial analysts feel it may take several years to achieve full recovery.
Investors look to gold as a tangible asset class that will always have intrinsic value. Gold will not drop markedly due to accounting scandals or any market failure. Gold has always proven to be a highly-effective means of preserving wealth and a safe haven in times of political and/or financial instability. We believe that many investors are buying or rolling their existing IRA into Gold and other precious metals for their long term profit potential.
Today, it is permissible to convert Traditional and Roth IRAs into gold IRAs using specified proof and bullion coins and bars. A steadily-increasing number of investors are making this switch based upon historical data and informed predictions that the value of gold will continue to trend upward. We believe that traditional IRAs invested in paper assets are vulnerable to many factors in today’s world. Therefore, rolling some of these paper assets into a Gold IRA is an excellent way to capture some of that appreciation.
