The price of gold endured its worst year since 1981 as the US economy improved, inflation remained at bay and worries about the financial system and gridlock in Washington faded.
Gold slumped 28% in 2013. The price peaked at $1,900 an ounce in August 2011 and has been declining steadily ever since.
Traders had bid the price of gold higher partly out of fear that the Federal Reserve’s aggressive easy-money policies would lead to inflation and weaken the US dollar. When that didn’t happen, demand for gold fell.
Gold is the only store of wealth that has a proven track record over thousands of years, and as such its inclusion should be considered for all investment portfolios.
The first rule of investment is preservation of capital. The second is to go searching for gains or income that fits with your appetite for risk. Gold has been the insurance of choice for thousands of years to satisfy the first rule, despite the fact it generates no income and actually incurs costs for storage.
Red IFA recommends gold as part of its investment strategy for investors with a medium or higher risk strategy.