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Buy gold and get rich faster

Updated on November 15, 2012

Buy gold worth at least US $ 1000 every time

Do you buy gold?

Do you have investment surplus? Are you looking for opportunity for investments where the returns are better than those from Bank deposits, government securities, etc! Gold purchases offer promise based on historical trends noticed for last 5 years.

All the other investments are outshone by gold that appreciated by 3 times in just last five years! Further appreciation of gold now slated to go up by 2 times to 5 times within next five years! The next best investment in terms of returns is real estate but entry and exit into real estate is still tougher! Comparitively, gold acquisition is an easier process.

After a long stagnation for 15 years till 2002, gold prices witnessed the following trends in US $ per ounce as below for the last 10 years!

2002 : 400

2007 : 625

2012 : 1725

gold historical prices Source: website

Gold prices are expected to increase as:

Gold is real money and real symbol of people’s prosperity! Only 2500 MT gold is mined per year worldwide! The mining costs are becoming increasingly expensive every year making gold mining unviable with many locations the world over!

During the centuries till 18th, gold coins were the currency for the nations and we did not find inflation then! The reason is that if government was short of gold, it could not resort to excessive gold production. Hence when during golden era, little money was chasing little goods keeping the prices at bay. We do not have that compulsion with paper currency! To meet budgetary deficits, the Central Banks of the world print more currency! More money chases fewer goods, leading to artificial price spiral! The Central Banks now hold substantial part of their reserves as gold! Chinese government has been acquiring gold perhaps as a part of changed monetary policy and hence holds huge gold reserves now! Following China, the other major Central Banks of major economy are holding substantial part of their reserves in Gold! 50% of world gold reserves is held by the governments through their Central Banks.

The US economy is in a unique position being the biggest and the most influential. The huge government and trade deficits of USA can cause run away inflation in USA which can affect other nations' economies too! The prices of gold which is a short supply bullion, will remain bullish for some more period in the long run too!

Sensing the advantage of holding on to gold as an investment asset, corporate and institutions are entering the purchasers’ roles in a major way! Silver and platinum too are proving to be profitable investment avenues.

As per IMF reports, it is China, Japan, Russia, Saudi Arabia, Brazil, Taiwan, Switzerland , Korea and India that hold top 10 ranks in gold reserves. Most of these countries hold gold a form of investment. Due to Chinese government demand and Indian household demand, gold prices will firm up. The economies of Russia and Brazil are growing. Saudi Arabia, Japan, Taiwan and Korea continue to prosper and unlikely to sell away their huge reserves .This may further firm up the prices.

It helps if we hold about at least some investment share in gold. Even if the prices of gold just double in next 5 years, that still makes a better investment decision in terms of returns than Bank deposits, debt instruments, etc. However, please watch the prices movement in the short term and ensure quality of gold purchased! You can also invest in gold traded mutual funds that are marked to market prices.

In conclusion, gold emerged as an alternative form of investment and if handled well, this can be a good component of wealth management strategies over the long run!


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