The price of gold has recently dipped to somewhat alarming levels. Gold and silver buyers should avoid panicking, look closely at events in the market, and approach decision-making in a careful and deliberate manner. Reviewing the following market-event examples can provide you with food for thought on how to approach your precious metals investing.

Russia Resumes Gold Acquisition

The low price of gold is appealing to some governments. Russia has recently returned to purchasing up large amount of gold. After a short lull of virtually no buying, Russia not only resumed acquiring gold, the country has made some of its largest purchases to date.

Obviously, the more gold Russia acquires and stockpiles, then the greater the potential exists for the price of gold to increase. So, even though the price in gold may be dropping for now, the potential for greater scarcity could mean an uptick in the future. If you are speculating on possible increases in the price of gold, this information could help with making an investment decision.

A Lesson from Great Britain

If the massive buying and stockpiling of gold increases prices, then logic would dictate selling gold in huge quantities should drive the price down. This is not necessarily the case. When he was Prime Minister of Great Britain, Gordon Brown, sold off massive amounts of his country's gold. Shortly thereafter, the price of gold increased, much to the chagrin of the British economy.

Glutting the market hurts price value when no one is buying. When buyers start massively buying up all that gold as a hedge against weak currencies or stock market instability, then the glut is not going to last. The situation of high demand once again creates scarcity and price increases. People who rashly sold gold in a panic in the aftermath of the British sell-off ended up making a huge mistake. Keep this in mind when panic starts to influence and, possibly, overtake your own decisions.

Avoid Rash Decisions

Among the biggest mistakes people involved in precious metals investments make is acting too rashly without clearly looking at an overall picture. If you are a serious investor in precious metals, look at the overall big picture of trends as they play out over a course of months. Doing so helps you make more effective decisions about buying or selling gold, silver, and platinum.

For example, as the price of gold drops, a decision can be made to sell a reasonable percentage of your gold holdings. This might end up being a better plan than selling everything overnight. You could also look at trends developing over the previous 90 days to determine what percentage of monthly discretionary income would be the wisest amount to dedicate towards buying gold during the course of the next 90 days.

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