Ok, I get it. All the talk is of a sharp and sustained rise in the gold price over the next couple of years, perhaps towards and beyond historic highs, but will this just lead to another unsustainable bubble (more akin to tulips or the early Bitcoin rush), or is there actually more substance to it?
Either way, Phoenix Precious Metals are out to show that it isn’t necessary to buy gold based purely on price speculation and that there is a more innovative option out there, that provides the opportunity for greater profit if the price does rise in line with market expectations and a hedge against loss, if not.
Let’s have a dive into the talk on price.
The long-term charts show a long term sustainable rising trend, punctuated by a spike between 2011 and 2013 and a sustained recovery to where we are now.
But it’s the current trend and the forecast for the next couple of years that has got everyone talking and the bullishness of some of the forecasts are quite something to behold.
Bank of America, to the delight of price speculators, have their new 18-month gold price of $3000 per ounce. This aggressive expectation is based on the assumption of massive Central Bank Stimulus packages and sustained economic turmoil, leading to a massive influx of capital into gold.
You then have fxempire.com suggesting on May 8th,2020 in a headline forecast that prices could exceed an incredibly bullish $10,000 per ounce this decade.
But nay-sayers are still out there. Take the interview on KITKO News with Phil Streible, Senior Market Strategist at Blue Line Futures, who is expecting a correction in the gold price in the short to medium term, citing the downtrend and adding “I really think that gold is not going to be this great asset”.
Arguments can be made for the whole range of price predictions, but is it really sensible to base your decision to add gold bullion to your investment portfoliobased on the most bullish of predictions? After all, if accurate, it would take us well into never seen before territory, some 50% – 100%+ more than the all-time high at least!
Ok, so let’s assume that you have decided to buy gold, but you could naturally do without the stress of worrying about whether the bulls or bears on price forecasting will turn out to have been right? Well what can be done, as surely when you purchase gold bullion you buy it at (say the LBMA) market price and have to hope for the best don’t you?
Yes, that’s the normal order of things of course, but happily that doesn’t have to be the case.
Our commercial partners, Phoenix Precious Metals believe that their APDG product is a better way to buy gold bullion, offering purchasers the chance to benefit from the incredible forecast price rises if they do happen, with a hedge against any downside if the majority of the talk was wrong.
The PPM APDG (Advance Purchase of Discounted Gold) product is both innovative but simple and easily understood, offering the advance purchase of 99.99% gold bullion at LBMA (market) spot price. The gold is delivered to a secure Swiss Vault in equal amounts over a 24-month period and held in the buyers personal account, to which they are the sole custodian. APDG Purchasers receive direct confirmation of each monthly delivery from the Swiss Vault, along with monthly statements of account. Liquidity is built in as delivered gold can be easily sold for the prevailing spot (market) price at any time.
But here’s where it gets interesting, the APDG buyer also receives additional gold (equivalent to 1 ounce per 100K purchased) at no further cost, again delivered in equal instalments over the same period. This adds up to an “effective discount” of around 26%, assuming a flat gold market spot price.
Bottom line, the main reason why 79 Distribution are so excited to be the global Marketing partner of Phoenix Precious Metals is that the APDG product provides purchasers with the best of both worlds. Firstly, a vital hedge against a downturn in gold prices, with healthy profit still made even at a 20% drop in price and secondly, the quid pro quo of hugely enhanced profits should all the speculative price talk turn out to be right!