The Goldrush is dead and we are still talking about it: The truth about gold and precious metals
Gold prices fell more than 2% on Monday, as investors rushed to get their hands on some precious metals.
Gold prices have plummeted since the beginning of 2017, with prices at their lowest point since November.
But a drop in gold prices can have a positive effect on the price of gold, since it reduces the value of other precious metals that can be found in a safe place.
In the past few years, gold prices have seen a lot of positive developments.
The value of gold has gone up since the Federal Reserve began easing monetary policy.
The price of a barrel of oil also went up during the OPEC oil embargo.
The recent drop in the gold price is a good thing for the price, said Andrew Wilson, chief economist at RBC Capital Markets.
The drop in prices will allow people to spend more of their savings on gold and silver and will also help to stabilize the price.
“The gold price will probably go back to where it was before the collapse in oil prices,” Wilson said.
“People will be willing to spend gold for gold, even if the price drops.”
He said there is a lot more money floating around in the precious metals market than there was a few years ago.
“We’re not just seeing it in the dollar, we’re seeing it floating in gold and it’s just not that high at the moment,” Wilson explained.
“Gold is going up and we’re not seeing a lot in the way of recovery.”
He pointed out that the market is not really overbought.
“There are still a lot, if not a lot to be excited about,” he said.
The drop in price is not expected to last long.
It is likely to continue until it is clear that the US will start to see an uptick in economic activity, which will help to support the price and boost the value.
The Fed, for example, has begun to slow the pace of its rate hikes, and a large portion of gold bullion will likely end up in the hands of investors.
The US economy grew by just 0.1% in the first quarter, and the unemployment rate is forecast to remain at 9.1%, which is still well below the peak levels in the recession that started in 2007.
Wilson said that the gold prices drop is not likely to last much longer, but it is important for investors to realize that the situation is very different than it was two years ago when gold prices were trading at a record high.
“It’s not as if the market had a lot going for it,” Wilson added.
“There’s a lot happening in the world that we need to be aware of, and gold is one of them.”
Wilson said the recent price drop is a great example of how the market can change in such a short period of time.
“When we’re looking at this kind of situation, you see these bubbles pop, and that’s where the real danger lies,” he explained.
“People are buying at a discount and people are selling at a premium.
Gold is a very good way to hedge against this.”
Follow Andrew on Twitter: @Andrew_Wilson