The holidays are here and 2015 is right around the corner. For gold investors, this is the time to start positioning yourself for the coming year. A large portion of this analysis involves looking at the current gold and economic situation, along with a number of trends that you think will either continue into the next year, or maybe see some new trends emerge. With that in mind, here are some gold investing trends to look for in 2015.
Rising Physical Demand
This should probably be number one on the list of trends to watch for in the physical gold market next year. According to the World Gold Council, 2014 has actually seen a lowered demand for gold in nearly every category, as compared to 2013. Given the fact that the price of the yellow metal has more or less trended down or sideways for most of this year, that is probably to be expected. The Council reports that total bar and coin demand for physical gold dropped 51 percent between the third quarters of 2013 and 2014 (312.3 to 245.6 tons).
Additional Gold Demand Numbers
There are a number of additional data from physical gold demand which should be considered. Total demand was 929 tons during the third quarter, which most experts considered to be very soft. Jewelry demand was slightly lower, with a 4% dip, although there are indications this trend is reversing. Investment demand actually posted a 6% increase to 204 tons. It would have been interesting to see how this number would have been influenced by a rising price. The overall physical gold supply dropped 7% and the amount of recycled gold continues to shrink.
Central banks continue their involvement in the physical gold market. An extra 92.8 tons was added among all central banks. China is still a major player in the physical gold market, although a number of other countries have been following suit. This bears watching as it could eventually have a strong influence on the gold price and even future physical demand.
Physical Gold vs. Paper Gold
There can be no doubt to anyone who looks dispassionately at the current state of the US and world economies that debt is a big reality. The national debt of the United States currently stands at just over $18 trillion. If you were to factor in all of the unfunded liabilities incurred by our government, this figure would balloon by more than three or four times. They key question here is whether you think the government is likely to start actually attacking its debt problem and start paying it off, or not. If history is any guide, very few of our elected officials have the political will to do this. It would seem as if not only debt, but continued rising debt, is here to stay.
We are also very likely to see the return of increased inflation. Many economists are already indicating that a type of hidden inflation is already here. Chances are you have seen this, with prices of everyday items like food and clothes increasing. Clearly interest rates cannot remain near zero for much longer, so chances of increasing rates and inflation are both quite good for the year 2015.
Many analysts are convinced we will see a rise in the demand for physical gold very soon. If these trends do end up converging, it could make for some difficult economic conditions. In such times, it will be only natural that people start seeking safe havens and alternatives to those investments pushed on us by the mainstream media. We all know that gold is the ultimate safe haven and a place where people can…and will…run to for protection from the economic storm outside.
If things get really bad, which is certainly possible given the unsound financial position of the US government (imagine what would happen if China and and other countries refuse to buy more of our Treasuries), this could spark a major tidal wave of demand for physical gold. In such a scenario, not only will people want gold bullion for an element of safety, but also for actual use. In the case of a severe dollar crisis, our paper money might see very high inflation and end up being worth very little. On the other hand, having smaller denomination gold coins could be extremely helpful in purchasing needed goods and services, like food and shelter.
Popularity Of Bullion Bars
In terms of buying and/or holding physical gold, there are really two general choices. You can either choose coins or bars. There are a myriad of options and denominations within each of these categories. Certainly, both have their merits, but we could see an increase in the popularity of bullion bars during the year 2015. Why?
The main reason is due to the premiums. A premium is the amount you end up paying above the spot price of gold. The fact of the matter is that many coins have premiums much higher than what you will see on actual bullion bars. Buying an American Eagle or any other coin, for that matter, means you will be paying a higher premium than if you decided to buy a bullion bar.
Mid-Grade PCGS Certified Coins
One of the major exceptions to the rising trend of bullion bars over gold coins may be in the mid-grade certified coin market, especially those graded by PCGS. These would be coins which grade somewhere in the MS-61 to MS-63 range. Those having more common dates should show a bit less of a premium than other coins in this category. The increase in their popularity is likely because investors will not only benefit from rising gold prices, but there is also an element of numismatic (collectible) value. Collectors have sometimes been known to pay a premium over and above the gold value simply to obtain a particular coin or date in order to complete a collection.
Bullion has also suffered from a rather lackluster performance in recent years. In fact, ever since 2011, things have not been looking too bright for bullion. Because of this, some investors have started looking for other avenues or sections in the gold market. Semi numismatic coins like the Saint Gaudens and the gold Liberty coins seem prime for an influx of new demand and interest, being anywhere between 200 to 400 percent below their historical highs. Of course, these would likely only be serious investments for the long term and serious investor, not anyone looking for a quick turn around or trade.
Given all of these gold investing trends to look for in 2015, next year promises to be quite interesting. There are a lot of trends and the potential for huge change in the gold market. By all means take a closer look at any of these trends which holds a particular interest for you. We also would invite you to contact the Certified Gold Exchange for additional information and advice on what to look for in 2015 and beyond. Call us today at (800) 300-0715 or visit us online at www.certifiedgoldexchange.com to claim your free copy of our 2015 Guide on Profiting from Gold Investing Trends.