Investing In Gold - Part One
Welcome back! If you are new here, or haven’t been here for a while, you might like to catch up on our last 7 part series on asset allocation, where we touched on quite a few points about establishing a functional, diversified and profitable investment portfolio.
Today we are venturing into a new 7 part series on all facets of Investing In Gold, so let’s get on with it…
Investing In Gold - A Brief History
Investing In Gold has always been a reasonably popular option when it comes to the global stock market. A precious metal, it has been seen as a rock-solid bastion of investment potential since the beginning days of stock trading.
However, these days the value of gold has been brought to question, and some are wondering if it is just a meaningless relic of the past, a treasure of barbarians no longer valuable in the context of modern civilization. Where paper money and credit rules, these people believe that a material like gold has limited application in the economy of today’s brave new world.
There are those who are staunch opposites to this school of thought. They believe that gold is a material with intrinsic value due to the properties it maintains as a resource. This population of conservative thinkers believe that gold is a highly unique and very necessary element regardless of the changes that the global market deals with on a day-to-day basis.
Whatever the case may be, gold has maintained a strong presence throughout the history of civilization and can be traced back to the roots of the earliest economies. As a material that has long since existed prior to modern currencies, it helped to establish the first forms of a standardised basis for transaction representing goods and services. The prices of goods and economic systems have radically changed throughout recorded history, but gold has been at the center of almost every civilization for the past two millenniums.
Having said this, why aren’t all investors convinced of gold’s value? Why do some flock to it, while others totally avoid it at all costs? Some love it, others refuse to deal with it. What does gold mean to you and your hard-earned money, and what happens when a country decides to abandon gold as a standard backing monetary value?
Well, that’s pretty much it for now. Stay tuned for more information as we discuss the history of gold, how it has defined the principle of exchange, and what you can do about this incredibly historic and famous asset!
See you next week for part 2 of Investing In Gold.
Sean Rasmussen
The Bullhunters Guide
Universal Wealth Creation © 2004 - 2009
Tags: Investing, Investing In Gold, Stock Market, Stock Trading
November 10th, 2009 at 3:33 pm
It is interesting to note that between Oct.19th -30th this year India’s Central bank purchased 200 metric tonnes of gold from the IMF, making this the biggest single Central Bank purchase over such a short period for the last thirty years. Prior to this, India held 350 tons of gold at the end of 2008, placing it in a position of the 12th largest government owner of gold in the world, the additional purchase of 200 tonnes propelled it to 9th place infront of Russia, and at present India is the largest buyer of gold for jewellery and investment.
The IMF approved 403.3 tons of gold for sale in Sep. this year with China, Russia and Brazil showing interest in the balance after India’s purchase of 200 metric tonnes. Since 2003, China has increased its gold reserve 76 percent to 1054 tons. So what does this mean? Maybe that gold is the rock that economies can stand on during world economic downturn and diminishing currency values, a rock solid foundation for future economic stability??
For those of us who don’t have the funds to purchase gold in abundance, there is always the option of buying small cap stocks in fledgling gold miners, many of whom will develop their own tenements and others will sell out to larger players, but either way stock prices should benefit from rising gold prices at the moment. There are certainly no guaratees that this will happen, but the same applies when you buy gold bullion.
Happy Investing.
November 23rd, 2009 at 12:26 pm
Interesting blog! there’s still more areas mining for gold. It has not lost its value though Economy is the main problem.