A lot is happening in the gold business. Prices are getting low and everybody is losing interest in the precious metal. Demand has dropped in the past few weeks. Despite the worldwide financial crises, gold hadn’t the chance to recovery.

The productive industry is hurt too. Enterprises are evolving now to survive. The investors have now the duty of analyse a more complex situation. Where the public and the private find face to face.

A great part of the deal is because the Chinese declarations about their gold reserves. This affair has caused great damage to gold prices. But, of course, that’s all part of the plan.

There something you need to consider and I hope that the next lines help you to think about it. You should keep your gold right now. You should keep your gold investments. In fact, you should consider buying some more. I really mean it.

So, why?

Gold Prices Are Cyclical

In the past years, we can see the proof about this. Gold prices are totally cyclical. When they are down, the historic evidence tells us that, at any moment, they are going up with an important rebound.

Also, if we look back, we can see how bearish gold markets don’t last long. High prices are always more durable. That’s a trend. This allows to make significant gains in no time. In that way, who bought gold back in 2004 at USD 435.60, ten years later, in 2014, made almost a 300% of return.

Industry Is Changing For Good

In times of crisis, imagination works double-time. This applies for the gold industry lately, who is changing strategies. On one hand, big Australian mining companies are selling important assets (like mines) to pay debts and gain some extra capacity for main projects. This move allowed minor players to buy unexploited mines with profitability potential.

And on the other hand, international enterprises, like OceanaGold Corporation, are doing the exact opposite: they are buying even more mines and other assets. OceanaGold just offered USD 884.84 for Romarco Minerals. Romarco has tried hard in the past years to be the world’s lowest-cost gold producer.

Three months ago, OceanaGold bought Newmont’s Waihi mine and one month after that, they acquired and important stake of Gold Standard Ventures, dedicated to exploration.

The experts see this moves right. They think that the whole productive scenario will, despite the low prices, give higher and higher returns.

China Is Lying

There is a conspiratione running among experts. China is often lying about their official data. And the last declarations about their gold reserves are important reports, that had a huge impact on the gold industry. Everybody expected huge reserves. Everybody felt disappointed when the data came to public.

Then massive selling triggered. But, this selling was part of the Chinese strategy. The PBOC knew that those numbers would disappoint investors all around the world. So, they made the data available a let the gold prices drop.

Why? They wanted cheaper gold. Now they have it. They don’t trust on the US Dollar and they want have an important share of their foreign reserves in gold, not in a fragile currency. They are selling expensive Dollars and buying cheap gold. Their plan worked. And, of course, they have a lot more of what they are telling us.

Future Bubbles

We have seen two major market crashes in the last 15 years. But, investors do everything at hand to forget those events and bet in favour of the volatile currencies. Financially, things aren’t ok. China had suffered a major crash and Greece isn’t well yet. So, we can consider another relevant crash coming soon.

Investors must remember: When the major crises start, currencies lose the majority of their value in no time. And gold survived all the economic crises to date. That’s a fact.

But is important to understand something: Gold is not an investment with a quick return. Gold requires patience and it should be seen as a storage for your wealth in dangerous times like these.