Jan 09

What’s Up With Those Gold Bears?

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An interesting article on the outlook for gold prices in the next few years that was published by gold-eagle.com counters the arguments made by the gold bears out there.

Here is a quick summary of the pro-gold argument:

  • Central Banks are now buying gold
  • Easy to find gold has already been mined
  • The Population has increased 53% since the last “gold rush” in 1980
  • The majority of the population increase has ocurred in India and China and these people love to own gold
  • Mining costs are increasing
  • Red tape and bureaucracy slow down the opening of new mines
  • Greenlight hedge fund went from owning GLD (a gold ETF) to owning physical gold
  • Currency concerns point to gold good investment
  • Politicians are making a lot of mistakes

Even if you are not as sure about the future of gold. I believe that is a solid prudent investment that everyone should make. Even as a hedge that gives you peace of mind. Buying gold can be justified on several levels.

Check out the full original article.

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Dec 28

Interesting Video on Gold

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This video was posted over 2 years ago. It’s still quite interesting. Most people look at gold as a hedge. Private investors should look to hedge other investments. As we have seen, with the recent financial turmoil having a hedge makes a lot of sense. For those of you new to gold this video provides a good introduction.

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Nov 25

Gold to $15,000 an ounce? Who knows?

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This video may project an over enthusiastic view of how high gold could go. However it’s worth a look. Enjoy.

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Nov 16

Gold Still Rallying

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Gold reached over $1,139 today as the rally continued. Some analysts believe that central banks are causing the current rally. No doubt, they are a contributing factor. However, interest rates have been extremely low for a sustained period of time. As a result, investors are running to gold as a hedge against the inflation that will occur if current interest rates are maintained. We could see a perfect storm for Gold.

As I have mentioned before. If central banks globally raise interest rates the Gold rally may be halted. However, there are broader economic implications to be considered. Right now Gold seems to be a good place to be in order to protect purchasing power.

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Nov 09

Gold Price Hits New High

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Gold hit a new record high of  $1,111.70 and ounce today.  Gold mining stocks also benefited from the current interest in gold.  However, it’s worth recognizing that stocks were also up today.  This points to the fact that the weak dollar is the main reason for the surge in gold and other asset classes.

There is also a believe in some quarters that China may pass on buying gold from the IMF. This is a significant consideration when looking to future Gold prices.  In an interesting article by Peter Koven this is highlighted in greater detail.
All in all, it seems that the two main questions that relate to gold’s current rally are
1) What is the Dollar going to do?
2) What are the central banks of the world going to do?

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Nov 09

Gold Price Surges Past the $1,100 mark

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The rally continues as gold broke the $1,100 mark today. The main reason for this is the Dollar weakening against other currencies. As a result, it also weakens against Gold. The low interest rates maintained by the Federal Reserve indicate that this Gold surge may continue.

Speculation is rife that more central banks are considering following in the footsteps of the Indian Central Bank and buying Gold. The combination of the Dollar’s weakness aligned with the speculation on more central banks buying gold may see this rally continue for a little while longer.

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Oct 17

Wow What a Time For Gold

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Recently, Gold hit three consecutive highs. This has been based on a general hedge against the US Dollar. Some analysts believe that Gold will continue to rise while others believe that it was fall because the Dollar was oversold last week. Again, when it comes to Gold investing from an individual’s perspective the long term question is the most important. Most of the speculation regarding Gold in the media is focused on the short term movements. That’s a game you should be wary off.

I don’t believe in short term speculation when it comes to gold. For an individual, you should focus on using Gold as a means to protect the value of their savings in the long term. When inflation is considered Gold is still a long way off the crazy highs of the late 1970s into the early 1980s. The potential for further increases is there. However, remember that the 1970s prices where crazy. Look just take a balanced approach to the current move upwards in gold.

Be aware that in the future many central banks throughout the world will consider hiking interest rates to reduce the money supply and stop inflation. This will have an effect on gold. Keep the radar switched on.

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