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Is Gold Still An Investment Winner

Updated on October 4, 2012

Winning With Gold

Investment experts can't decide whether or not the gold rush of this new century is over or not.Could you still be on to a winner with an investment in gold?

It has been a "golden period" for investors of the "bullion". For the past eleven years it has increased in price but can it rise in value any further? In August 2002 it traded at £258 ($400)per ounce, and incredibly at the end of 2011 the value of gold had exceeded £1,190 ($1850).This was mainly due to the concern over the euro and the European nations debts.This has currently dropped back to £1,100($1,600) per ounce.

The euro worries have not gone away and the crisis seems to be forever uncertain, and both Britain and the USA have taken to printing more money (quantitative easing).

Gold Or Money?

Years and years ago paper money was solidly linked to the central banks and their gold reserves. All the notes that were printed stated you could exchange your dollars or sterling for its value in gold. Now it is just a promissory note (promise to pay the bearer on demand).

Today paper money appears worthless and only worth the value of the paper it is printed on.For many decades we have relied on money lending leading to a furious state of debt and consumerism.

Those who saw the financial meltdown, and wall street crash coming in 1929 invested in gold and gold mining stocks that flourished and held up.

During the depression which lasted till the mid 1930's gold hoarding was forbidden, and all gold coins were returned to the United States Federal Reserve.(there were certain exemptions such as collector coins).The removal of the gold standard had a world wide affect on all world finances and economies.

Warren Buffet

Prominent investor Warren Buffet has long been a detractor of gold as an asset and recently described gold as "valueless" . He has been wary of the rush for gold and considers the price to be inflated as investors are shunning property and shares, the bubble he says will eventually burst.

He has always found the prominence of gold mystifying. Saying " we find the gold hidden away in the ground, dig it up, melt it down and then hide it away again as we hoard it.

Will The Bubble Burst

Maybe money and gold are only as valuable as we want them to be or let them be. Gold is often seen as the choice of the cautious investor or the pessimists.

Many people regard the "fiat" paper money structure as worthless. Gold has been the mainstay of currency for more than 6,000 years and regarded as the definitive and supreme of all.

Whatever your view is, it looks as if many people can see history repeating itself. The world debt problem is not going to find a quick and easy solution, unemployment is also rising. Economic growth is slow with people relying on the financial systems to make money.

It is hard to see gold not reaching a higher demand and prospering in this current climate as a much more secure commodity.

But still, how secure is your investment?

Is gold a good investment

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    • tipstoretireearly profile image

      tipstoretireearly 5 years ago from New York

      Its easy to make a case for gold to continue appreciating in light of the way the central banks are printing money. On the other hand, gold itself pays no dividends, so its fair value is difficult to determine. As in many other times, the best idea is to hold a small position in gold as part of a well-diversified investment portfolio. Interesting hub! Voted up.

    • MerCyn60 profile image

      MerCyn60 5 years ago from New Jersey shore

      Gold may be a good investment, but the question is not a simple yes or no. People too often put all their $ into one asset, whether it is gold or real estate or stocks or whatever. Investing mantra is diversify,diversify, diversify. Some gold is OK. The price of gold will, when the economy is once more recovered here and abroad, fall.

    • Zubair Ahmed profile image

      Zubair Ahmed 5 years ago

      Hi ronaldoh,

      Given the current financial situation in the world, gold is the best investment you can go for, if you have that extra cash.

      Let's face it no one can reduce the value of gold by 100%, but for paper money they can devalue at whim.

      If you have that extra money then go invest in GOLD.