The precious metals market unpredictability has many in a bind over which direction to go, those who are holding on to physical precious metals or even mining stocks are at the edge of their seats based on what has been unfolding, and many have actually turned towards the capital markets based on the more attractive returns that it has to offer.
Although this may seem to be the best move currently and for the short run, those holding on to precious metals related assets are definitely in a better position for the long run. This based on the fact that the precious metals market has been pressured into submission by the powers that be, and it is only a matter of time before the lid pops open sending the precious metals markets soaring. Gold related assets are and have always been long term investment schemes and buying gold with the intention of making gains in the short term is not only unadvisable, but it is also extremely dangerous from a financial perspective as the precious metals market is known to fluctuate steeply in both ways triggered by the slightest economic spark and unless would be investors have enough patience and resources to endure market pressures working against their positions it is best not to dabble in it.
Most gold bugs who own physical bullion however are optimistic about the current lower prices of gold as it is allowing them to bring the cost of their physical gold holdings by at least 10 % giving them better margins for the future.
What exactly is happening to the precious metals industry is pretty obvious, despite the current shaky global financial situation and volatile markets the strength of the dollar and the appeal of the capital markets are holding ground. Coupled with lower oil prices and governments trying to stimulate economies which require them to inject funds into the markets, the lure of the capital markets is difficult to resist. This has also rendered conventional theories related to the commodity markets and how they respond inapplicable as markets are anything but predictable these days. One thing that is for certain is the fact that the disorganized and fragile global financial system is destined to crumble as even well informed financiers are uncertain of the mechanics that are at work and over the last two to three decades the financial machine has become too obscure to a point that it has become mystical and the only constant in the equation seems to be the fact that gold and other precious metals are still being considered as a safe haven by everyone and it does seem that most have a finger or two in precious metal pies in the event that the capital markets disintegrate.
Many have grown tired of waiting for gold prices to rise and gold bugs are reeling from the losses that they are incurring from the costs of holding, storage and insurance and many gold bugs fear that when the time does come to sell, the margins will not be justifiable.