CMC Markets: More that glitters than just gold in 2012

There's more that glitters than just gold in 2012, says CMC Markets

Precious metals make good investments but timing critical

Sydney, 11 January 2012 - With market volatility continuing, precious metals remain a good diversifying safe haven for storing wealth in 2012. However the latest CMC Markets Precious Metals Pulse urges investors to fully understand the cycles of each metal and to actively manage their exposure to make the most out of their investment.

In the CMC Precious Metals Pulse Ric Spooner, chief market analyst at CMC Markets, offers investors guidance around metals predicted to shine the brightest in 2012 and when should investors access them. Among key investment insights for 2012, Mr Spooner says:

Many factors seem to indicate precious metals will perform well in 2012, including low international interest rates, countries such as China buying gold as a way to diversify their exposure to US dollars, and growing wealth of traditional gold owning nations such as India and China

However timing will be crucial as when you buy will have a big impact on how effective they are as a store of wealth - an investor who bought gold near the peak of the market in 1980 for example would still be behind in real terms. Investors should ensure they wait on opportunities to buy at reasonable value rather than chase the market.

Precious metals can be a good way to store wealth as they are a prudent defensive play in these troubled economic times, depending on an individuals' investment goals. However, Australian investors should also consider the implications of changes in exchange rates, as precious metals are quoted in US dollars.

Often gold prices move in different directions to the other major precious metals, silver and platinum. As a general rule silver and platinum are likely to outperform when the outlook for industrial production and economic growth is improving, while the reverse is true of gold. One of the consequences of current market conditions is there will be more frequent turning points in the price ratio between gold and the other two metals, meaning investors can benefit from active management of their precious metals portfolios.

About CMC Markets
The CMC Markets Group, a leading independent financial services provider, offers a range of investment products and investment tools including shares, options, listed managed investments, warrants, interest rate securities and Contracts for Difference (CFDs). Through our partnerships we can also provide access to managed funds and margin lending execution. In 2007 CMC Markets launched its broking service with the acquisition of Andrew West Stockbroking and CMC Markets Stockbroking is now one of the only non-bank aligned, online stockbrokers in Australia.

CMC Markets is a pioneer of CFD trading in Australia and a world leading CFD provider. With offices in London, Frankfurt, Dublin, Madrid, Vienna, Sydney, Tokyo, Toronto, Beijing, Auckland, and Singapore, CMC Markets represents clients in over 70 countries. The company was founded in 1989 and is regulated by ASIC in Australia. CMC Markets Stockbroking is a participant of the ASX Group.

ENDS

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