There are a lot of precious metals experts offering their opinions regarding where gold, silver, and platinum prices are headed over the next twelve months. There is very little cohesiveness among them; some believe prices will continue to rise while others argue the opposite will occur. The current recession has caused confusion in the markets. Trading prices for precious metals have vacillated according to patterns that offer little insight about the near future. Meanwhile, the Dow continues to ebb and flow with each report released by the government.

Our goal in this article is to provide clarity to the issue. While there is no way we can predict the movement of future gold prices with certainty, we can describe what the past has shown us. The following will help you decide whether you should sell your scrap gold, and reap the benefits of the metal’s current high price.

How Does Gold Perform In A Recession?

Historically, in times of recession, people moved their monies into gold. Unlike a fiat currency, there is a finite inventory of the metal, and production (through mining) is limited. This creates a predictable supply-demand mechanism. The more gold people buy, the higher its price rises.

The reason demand for the precious metal rises during times of recession is because people fear the effect of monetary inflation. Such inflation leads to the value erosion of dollar-denominated investments. Gold is considered a “safe haven.” Thus, people buy it when the economy falters, which causes the spot price to rise on the open exchange.

In Which Direction Is The Economy Headed?

Since the direction of the economy plays a key role in the direction of the price of gold, it’s worth reviewing the current recession. If the economy strengthens over the next twelve months, the precious metal’s historical performance suggests the price per troy ounce will fall. If the economy continues to falter, the price will either remain at its current level, or rise.

Many people who own old gold jewelry and scrap gold are holding onto their pieces. They are doing so in the hope the metal’s price will rise. Realize, however, that this is essentially a gamble on the direction of the economy, an area in which trained analysts make predictions that are often incorrect. The question is, can you forecast the economy with a higher degree of accuracy?

When Selling Your Gold Makes Sense

Ben Bernanke, current Chairman of the Federal Reserve, has repeatedly claimed the economy is recovering. Though growth in the GNP is slow, he maintains there are distinct signs that signal an end to the current economic turmoil. If Bernanke’s prediction is accurate, and the recession ends, the price of gold will likely decline for the reasons explained earlier. And depending on the strength of the recovery, the price may decline significantly.

It’s also worth bearing in mind that the price of gold has recently reached historic levels. While there is no ceiling past which the price can climb, many experts argue the bull market is nearly at an end.

Finding A Trustworthy Buyer

You have likely noticed the proliferation of gold buyers over the last few years. This makes selling your pieces easy. The challenge is finding a reliable buyer who will offer you a fair price. Many buyers will offer a fraction of the current market price, hoping sellers are uninformed about the metal’s value. Others may offer a high price, but disappear once they receive your pieces.

Look for a refiner who has built a reputation in the gold selling and refining industry. The number of years of experience they have is a direct reflection of this reputation. The refiner should offer you a fair price, and be willing to promptly return your collection of scrap gold if you decline it. Such buyers will ensure the transaction is simple and problem-free.

Author Bio: The best online resource to Sell Gold or sell jewelry can be found at refinity.com

Category: Finances
Keywords: selling gold, sell gold, selling scrap gold vs keeping it, hoarding gold