The World Gold Council just released their Q3-2012 Gold update. We thought that we would review some of the highlights.
- Gold (US$/oz) returned 11.1% in the third quarter as investors responded to further central bank measures aimed at stimulating the economy. Volatility decreased during the period, with gold prices experiencing little movement in the first half of the quarter; correlations to other assets, generally low, remained similar to those seen in Q2.
- Central banks announced a continuation of their unconventional monetary policy1 programmes in Q3.
- Central banks have numerous rationales for undertaking unconventional monetary policy, including lowering borrowing costs and supporting financial markets.
- Financial assets have responded to central bank policy announcements, but gold’s reaction has been the strongest.
- There is a consensus that these policies drive investment into gold purely due to inflation-risk impact. We believe that there is not one but four principal factors that provide further support to the investment case for gold:
- Inflation risk
- Medium-term tail-risk from imbalances
- Currency debasement and uncertainty
- Low real rates and emerging market real rate differential
Source: World Gold Council Q3 Report
If you want to see more of the details we recommend you click on this link World Gold Council Q3 Report to read more.
What this means for self directed IRAs
The report shows that if our recommendations for buying and holding gold over the last quarter, you would have realized a 11.1% return on investment. The report supports our commentaries regarding central banks, QE and inflation concerns. These trends are not reversing, but continuing and strengthening.
Those self directed IRA accounts with precious metals have been positioned well and have seen significant returns. For those self directed IRA investors not holding metals or not holding a balanced portfolio of metals, should take note.
Self Directed IRA recommendations for precious metals IRAs
We still recommend buying and accumulating metals in your self directed IRA. You should check your portfolio balance and exposure to precious metals to insure a proper allocation.
For those of you with the correct balance of metal, we recommend to continue holding your metals positions.
Disclaimer: The information provided is for educational purposes only and are not a solicitation or offering of an investment, investment advice, or tax advice. You should consult with your tax, legal or financial advisor to determine the suitability of any investments made with a self directed IRA account.