Gold’s price has been incredibly volatile over the last few years, and it has been a particularly punishing period for the world’s wealthiest people. A remarkable number have cashed in or sold out of their gold holdings.
But we are now edging towards the end of 2021, and the next big decision for investors is whether to cash in or keep the gold check the latest gold price.
History suggests that most investors should hold on for a few more years.
The US Gold Bureau, a precious metals dealer, estimates the world’s billionaires will hold 888 metric tons of gold by 2022, about 6% more than they do now.
The US Bureau, which sells bullion to customers over the counter (see below), says 554 tons will be added between 2018 and 2021.
There are signs that gold may have had a difficult few year. The US Gold Bureau’s average turnover rate over the past five years has fallen from 15 tons per quarter to 8 tons per quarter.
“These are signs of nervousness,” says Christie Tchilnassi, head of marketing at the US Gold Bureau. “There has been a substantial reduction in turnover in the last few months.”
Gold and other precious metals are sold by the kilo, so a single investor can own thousands of ounces or pounds of gold.
The price of gold is set on the London and New York gold market, where the buying and selling of 10 carat gold is done by global financial players such as banks and hedge funds.
There is a small, but growing, group of buyers who use their bank accounts directly. These transactions happen outside the system, and the price is determined by the largest buyers and sellers on the market.
In the last couple of months, the silver price has increased by more than $1 per ounce. The silver price has been boosted by increased demand and more supportive dollar, which have helped the silver market by boosting the exchange rate between the US dollar and silver.
As a result, it is estimated that silver could rise to as much as $19.90 per ounce by the end of the current year.
All the factors that have led to higher silver prices in the recent past are still in play and look to support the price.
However, it is important to note that silver has long been the star of the commodities markets. It has always been the greatest support to the precious metals sector, and, at times, it has contributed more to the precious metals than any other metal.
Therefore, it is hardly surprising that silver has been the prime beneficiary of all the factors that have led to increased silver prices.
Silver moves higher
Demand for silver has risen on the back of factors such as buying by central banks, changing of its monetary policy to focus on domestic economies and monetary policy, and a change in its price.
In 2018, physical demand, with respect to silver, is likely to rise, and it may have contributed to the rise in silver prices in the first quarter of the year. In the last quarter, the IMF has cut its forecast of the silver demand for 2018 to 638.6 metric tons. However, after a two-quarter rise, the total supply of silver for 2019 has been estimated at roughly 921 million ounces.