Gold Prices are Volatile . . . What Are Investors Supposed to Do?

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Written By Barry Lenson

What’s going on with gold prices? Here are two headlines we have seen in just the last week . . .

“Gold Prices Tumbling to Cover Margin Calls”

“Gold Prices to Surge as Coronavirus Crisis Boosts Stimulus Hopes”

But perhaps this headline is the most accurate of all . . .

“Gold Prices Volatile”

What could be more accurate than that last headline? Gold prices are indeed volatile, and no one really knows where they will end up, or when things will settle down.

So What Is the Best Gold Investment Strategy for Up-and-Down Uncertain Times?

That is probably the only question that is really worth thinking about if you are someone who likes to make money by trading in gold. The most tempting strategy (which is not really a strategy at all) is to play ostrich by simply sitting on the gold you own and waiting for this period of uncertainty to blow over.

But is that really the best strategy? How much money do ostriches make? Here are some alternatives to consider.

Lie in wait and buy gold when prices seem to have hit bottom.  In other words, buy gold at the lowest prices you can and hold it until prices recover. In other words, “buy low and sell high,” which is a classic investment strategy that applies to many kinds of investments. But with gold prices heading up one day and slumping the next, this strategy is not for the faint of heart.

Adopt the optimistic view that gold prices will inevitably rise. This could be a good strategy to apply, based on the view that gold prices always trend up over time, because gold is a solid long-term investment. But look at this chart of gold prices. It really doesn’t tell you that gold is trending consistently up, does it?

A More Reliable Gold Investment Strategy: Buy and Hold Gold Scrap

Gold scrap offers a hedge against up-and-down gold volatility. Why? Because when you buy gold scrap, you can acquire gold at dramatically reduced prices. For example, you might be able to spend $100 to acquire a quantity of gold scrap in the categories we write about often on this blog (dental scrap, gold-filled eyeglass frames, gold-plated jewelry, and even sweepings from the floors of jewelry factories) that contains gold that is worth $300, $400, $500 or more when you send it to Specialty Metals Smelters and Refiners to be processed.

You can apply the “buy and hold” strategy with gold scrap, by buying scrap today, having us test and hold it for you, then sell it when prices rise. And you can apply this approach whether you currently own gold scrap, or if you plan to buy scrap in the future.

Want to know more about how to make money in gold scrap? Why not call our precious metals consultants at 800-426-2344?

Barry Lenson
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