Gold has been doing very well lately reaching new record levels of just over $1,200 per ounce.
Is now a good time to sell gold?
I know that record price levels mean it is a good time to sell any type of asset, but the question is will gold go higher?
There are a few reasons why gold might go a little higher. First, people are still worried about a shaky stock market and economy. Europeans have also started buying gold as they increasingly worry about their currency and economy.
The reason to think gold might be at the end of the positve trend is that the economy in the United States is improving. With the bailout announcement in Greece, the potential for a collapse is much lower.
The improving economy means a safe haven like gold will look less promising. In addition, gold investments don't pay any interest so any other investment that looks promising will have a built in advantage over gold investments.
Another thing that worries me about gold is that the price has largely gone up due to large institutional and government gold purchases. Countries like China, India, Venezuela, etc... have been buying large amounts of gold to protect against fluctuating currencies.
This means that there may come a time when it doesn't make sense for these countries to continue buying gold. If the large institutional and government investors start to sell gold, the price could drop quickly.
The thing is that gold is not a long-term investment that you simple hold onto and profit off the interest being generated. With gold investments, you need to sell the asset in order to gain the price increases.
Now might be a good time to sell some of your gold investments and cash out some of those profits.