Is Gold Still An Investment Winner
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.
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?