Why Buy Gold

Why Buy Gold instead of other investments?

Exposed! Five Myths of the Gold Market

Claim a gram of FREE GOLD today, plus a special 18-page PDF report, and find out:

What’s been driving this record bull-run in gold?
Why most investors are WRONG about gold & inflation
How to buy gold — at low cost with no hassle

Get this in-depth report now, plus a gram of free gold, at BullionVault here…

Why buy gold?

If there is anything that the recent recession and the current debt crisis of the United States and Europe has taught the investor, it is that a return to roots is warranted. Overzealous spending with nonexistent (credit) and worthless (fiat) money has blown irrevocable holes into the current system.

Economic experts are now proclaiming the bubble blows and pops of the past two decades to be the normal state of the world economy.

The abiding hope of many investors is that the financial system can be saved by investing in things that actually have value.In a return to roots investing strategy, which has worked through recessions and depressions throughout history, it is essential to return to roots on the terminology which defines the nature of the investments that are made.Value in the bubble system is very short term and unstable. It is based on conjecture. Value in the real world is defined by scarcity and utility. Therefore things that can and are being made at will and are not scarce, like fiat money and all of its derivates, can not by definition be valuable. This is why gold and silver have hit new highs in the current financial crisis, and with every new bout of volatility, investors are seeking true value such as this more and more.

Credible economic experts have predicted a value of gold ranging between US $2,000 per troy ounce all the way up to US $5,000 per troy ounce in some cases. Every time naysayers of the gold and silver commodities rush say that the rush is over, and the price is almost certain to come back down, they hit new highs. The gold / silver price ratio is especially large when compared to historical record, which means that there may be even more opportunity in silver than there is in gold at this point.

It should be noted that most of the advisors who refuse to trade in the continued volatility of the paper and fiat markets are short term, conjecture traders. They profit off of the small swings in the market and often do not even have time to relay their every move to their constituencies, which may leave those with less agile movements in the market with less to show for a correct investment – or even a net loss.

In a return to roots valuation of the dollar and the Euro, both currencies become less valuable with each new dollar or Euro printed, respectively. And as the policymakers now have stated their intent to print more and more money to cover debts, along with a somewhat limited willingness to stop in the near future, investors can expect that when interest rates rise by action of the Federal Reserve, that their money will become increasingly worthless, even faster if the US loses its status as reserve currency of the world. This is perhaps an extreme to many; however, the United States recently lost its AAA credit status with the Standard & Poor’s credit rating agency, which is completely unprecedented.

Commodities have scarcity and they have utility, which means that in any environment, they will have to be used and will have real value. Investors wishing to protect their assets in the economic downturns of the past have historically clung to commodities, and they have been proven right time and again.

However, note that there is a difference between investing in commodities directly and investing in them via their derivatives, i.e. ETFs or commodity stocks. These are still subject to the conjecture of the market, and therefore may not give the investor the full value that a direct investment might.

Gold climbs higher on weakening US growth

AAP

Gold futures climbed for a second day on Friday, erasing this week’s losses as investors continued to close out bets on lower prices following the 10-month lows hit earlier in the week.

Others added to their holdings of the yellow metal on the view that the Federal Reserve may be more likely to deploy more easy-money policies after a set of sluggish economic indicators and the week’s bleak news from Europe.

The most-actively traded gold contract, for June delivery, rose $US17, or 1.1 per cent, to settle at $US1,591.90 a troy ounce on the Comex division of the New York Mercantile Exchange. During the week, futures rose $US7.90, or 0.5 per cent.

“It’s been a seesaw like I haven’t seen in a while,” said George Gero, a vice president and precious metals strategist with RBC Capital Markets, of this week’s trading.

“Funds ran out of gold. As soon as they ran out, they stormed back in.”

Gold prices crumbled at the beginning of the week, settling at their lowest price in 10 months Wednesday. Political deadlock in Greece and strain in Europe’s financial system sparked a rally in the US dollar at the expense of precious metals.

In recent months, Europe’s sovereign-debt crisis has stoked demand for US government debt and the dollar, making dollar-denominated gold appear more expensive for buyers using other currencies.

But the market’s ability to hold above its late-December intraday lows was taken as a signal that the selling was petering out, pushing some traders to close out bets against lower prices. The dollar, a headwind to gold as it climbed this week to the highest levels since January against the euro, paused Friday, easing the pressure on gold.

Gold’s rebound was also fuelled by the view that signs of weakening US growth could push the Federal Reserve to take new steps to ease monetary policy, potentially making gold more attractive as an alternative to paper currencies.

A disappointing reading on mid-Atlantic factory activity Thursday, and this week’s release of Federal Reserve meeting minutes showing some policymakers suggesting that more stimulus may be necessary if the economy worsens, both stoked speculation that a gold-friendly round of quantitative easing may be more likely now than it was a few weeks ago.

“With the prospect that growth may ease in the short-term, concerns of further quantitative easing may be gold-positive,” said James Steel, an analyst with HSBC, in a note.

In other precious metals: July delivery silver closed at $US28.715, up 69.5 US cents; July platinum finished at $US1,459.30, up $US5.90; and June palladium ended at $US603.60, down $US2.25.

Article source: http://www.businessspectator.com.au/bs.nsf/Article/Most-precious-metals-close-higher-UGT47?opendocument&src=rss

Why Buy Gold

Recommended

Why Buy Gold instead of other investments?

Gold climbs higher on weakening US growth

Recent Posts

Recommended