In spite of the recent decline in precious metal prices, today is one of the best times to buy gold. At least, that’s according to Forbes contributor Henry To.
Gold is “an attractive long-term investment,” To writes. “With gold’s recent decline to below $1,100 an ounce, I believe today is one of the best times to own gold.” (Source: Why Now Is A Great Time To Buy Gold, August 17, 2015.)
To outline three reasons for his bullish gold price forecast.
First; global gold mining supply is expected to decline significantly over the next few years. According to the World Gold Council, during the second quarter, global mine supply declined by four percent to 781.6 tons on a year-over-year change. Meanwhile, global gold exploration and development fell to a new low—declining by more than 60% since the late rally in 2011. (Source: World Gold Council, last accessed August 17, 2015.)
“Because of this decline in gold mining capital expenditures over the last several years, I expect annual global mining production to decline by 7% to 10% over the next several years, which in turn will support gold prices,” he added.
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Second; despite the strong U.S. dollar, global monetary policy remains uncertain. Although the Federal Reserve has repeatedly signaled that the interest rate will rise this year, the latest turmoil in the global economy may force policymakers in the Fed to reconsider their decisions.
Other countries such as Canada and New Zealand, as well as the European Central bank, continue to use their money printing program in order to get their respective economies to grow. In a stunning move, China devaluated the yuan to help its struggling economy.
To stated, “I believe a diversification of the world’s central bank reserves into the yuan (even just a 10% allocation) will in all likelihood result in a weakening of the U.S. dollar, which will in turn increase the attractiveness of gold as an investment or diversification tool for U.S. investors.”
Third; Mr. To foresees that Chinese and Indian gold demand will rebound. The report from the World Gold Council indicated that the global jeweler demand decreased by 14% during the second quarter compared to the same period last year.
“I see the second-quarter decline in Indian gold demand as temporary. With gold prices now solidly below $1,200 an ounce, I expect Indian gold demand to pick up substantially over the next several quarters,” he explained.
Mr. To believes that gold is a solid long-term investment. He thinks in this uncertain global economy gold investing ought to be one of the best alternatives for investors. Along with Mr. To, gold bulls have a positive gold price forecast in 2015.
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Mr. To isn’t the only one bullish on gold. Lots of savvy investors have noticed the Federal Reserve’s reckless monetary policy and are starting to diversify their portfolio into hard assets.
However, buying gold isn’t the only way to profit from the likely rally in gold prices. For the full story, check out our special FREE report, “A Golden Opportunity for Stock Market Investors.”