Comparing the Gold and Bitcoin Rallies
Europac's chief economist and well-known gold proponent, Peter Schiff, recently discussed the market movements of gold and bitcoin. Schiff pointed out that the pullback in gold prices, after reaching all-time highs last week, created an opportunity for bitcoin prices to increase simultaneously.
The Collapse of Bitcoin vs. Continued Rally of Gold
Schiff expressed his skepticism towards bitcoin, stating that he believes it will collapse spectacularly while gold prices continue to rally. He referred to the speculative frenzy surrounding spot Bitcoin ETFs, predicting that it will soon come to an end, leading to the downfall of bitcoin. He criticized CNBC reports that referred to bitcoin as "digital gold," arguing that it is simply a modern-day version of fools' gold.
Distinguishing the Gold Rally from Bitcoin Movements
Highlighting the differences between gold and bitcoin, Schiff emphasized that the gold rally is real. He attributed the pullback in gold prices to natural profit-taking and speculative shorts entering the market. However, he believes that these shorts will cover their positions during the pullback, leading to new highs for gold.
The Rise of Gold Prices
According to Schiff, the rise in gold prices is driven by the upcoming crash of the dollar and the U.S. economy. As world powers seek alternatives to the U.S. currency, gold becomes the most viable option, resulting in increased gold purchases.
What are your thoughts on Peter Schiff's opinion regarding the recent bitcoin price rally? Share your thoughts in the comments section below.
Frequently Asked Questions
Is it a good retirement strategy to buy gold?
Although buying gold as an investment might not sound appealing at first, when you look at the average annual gold consumption worldwide, it is worth looking into.
Physical bullion is the most popular method of investing in gold. There are many ways to invest your gold. It's best to thoroughly research all options before you make a decision.
If you don’t need a safe place for your wealth, then buying shares of mining companies or companies that extract it might be a better alternative. If you require cash flow, gold stocks can work well.
You also can put your money into exchange-traded funds (ETFs), which essentially give you exposure to the price of gold by holding gold-related securities instead of actual gold. These ETFs can include stocks of precious metals refiners and gold miners.
How much money should I put into my Roth IRA?
Roth IRAs let you save tax on retirement by allowing you to deposit your own money. These accounts cannot be withdrawn until you turn 59 1/2. There are some rules that you need to keep in mind if you want to withdraw funds from these accounts before you reach 59 1/2. First, you cannot touch your principal (the original amount deposited). No matter how much money you contribute, you cannot take out more than was originally deposited to the account. If you wish to withdraw more than you originally contributed, you will have to pay taxes.
The second rule is that you cannot withdraw your earnings without paying income taxes. Withdrawing your earnings will result in you paying taxes. Let's take, for example, $5,000 in annual Roth IRA contributions. Let's say you earn $10,000 each year after contributing. This would mean that you would have to pay $3,500 in federal income tax. So you would only have $6,500 left. Because you can only withdraw what you have initially contributed, this is all you can take out.
You would still owe tax on $1,500 if you took out $4,000 of your earnings. You would also lose half of your earnings because they are subject to another 50% tax (half off 40%). You only got back $4,000. Even though you were able to withdraw $7,000 from your Roth IRA,
There are two types of Roth IRAs: Traditional and Roth. A traditional IRA allows you to deduct pre-tax contributions from your taxable income. Your traditional IRA can be used to withdraw your balance and interest when you are retired. You have the option to withdraw any amount from a traditional IRA.
Roth IRAs are not allowed to allow you deductions for contributions. After you have retired, the full amount of your contributions and accrued interest can be withdrawn. There is no minimum withdrawal limit, unlike traditional IRAs. Your contribution can be withdrawn at any age, not just when you reach 70 1/2.
What Should Your IRA Include in Precious Metals?
The most important thing you should know when investing in precious metals is that they are not just for wealthy people. You don't have to be rich to invest in them. There are many ways to make money on silver and gold investments without spending too much.
You might consider purchasing physical coins, such as bullion bars and rounds. Stocks in companies that produce precious materials could be purchased. You might also want to use an IRA rollover program offered through your retirement plan provider.
No matter what your preference, precious metals will still be of benefit to you. They are not stocks but offer long-term growth.
Their prices are more volatile than traditional investments. So, if you decide to sell your investment down the road, you'll likely see more profit than you would with traditional investments.
Statistics
- If you take distributions before hitting 59.5, you'll owe a 10% penalty on the amount withdrawn. (lendedu.com)
- The price of gold jumped 131 percent from late 2007 to September 2011, when it hit a high of $1,921 an ounce, according to the World Gold Council. (aarp.org)
- (Basically, if your GDP grows by 2%, you need miners to dig 2% more gold out of the ground every year to keep prices steady.) (smartasset.com)
- Contribution limits$6,000 (49 and under) $7,000 (50 and up)$6,000 (49 and under) $7,000 (50 and up)$58,000 or 25% of your annual compensation (whichever is smaller) (lendedu.com)
- Gold is considered a collectible, and profits from a sale are taxed at a maximum rate of 28 percent. (aarp.org)
