Investor Hub

There are dozens of investment opportunities today. Some are tactile and some are not. Many investors today enjoy the look and feel of palpable investments like silver and gold. During unstable economic times, the price of silver and gold tend to go up.

As you might have guessed, the prices of both of these precious metals are on the rise right now. You can get your hands on your gold investment today before prices go through the ceiling. Why buy gold? There are many reasons, each of which will be explored here.

Gold is one of the most solid investments you can make today. The price of one ounce tends to flit around the $1,000 mark. While it is impossible to predict the price of gold 100% accurately, it can be stated with almost complete certainty that prices will continue to rise from where they are currently at.

That is the reason that the question why buy gold should be answered as quickly as possible. The longer you delay making your purchase, the more likely gold is to become even more expensive.

An investment in gold is something you can literally hold in your hand. Instead of having some intangible object as your investment, or something you never see like a piece of real estate in a far away location, you can see why buy gold when you have the chance to hold it in your hand and feel the weight of your investment in your hand. As for storing your gold, you can do so easily with a safe in your home or a safety deposit box in the bank.

The United State's financial situation is not something you can ignore. Instead of putting your money in something that relies on the value of a dollar to be worth anything, you can choose to buy gold and rely on its intrinsic value to protect you against inflation. The stability of gold is something that makes it an excellent investment for many people today.

It does not matter whether you only have a thousand or a little more to put into your investment. Even one ounce of gold can result in a solid return on your investment. If you have $10,000 or $20,000 to invest in something, now you know the answer to why buy gold. Imagine getting five-times your investment back! With the decision to buy gold, this is a definite possibility... [...] Read more!

"The great strength of gold throughout history has not been that you make money by holding it, but rather you do not lose. That ought to remain its best credential". A research study on gold established a remarkable consistency in the purchasing power of gold over four centuries. Its purchasing power in the mid-twentieth century was found to be nearly the same as in the middle of the seventeenth century.

You can safely invest in gold. But take care to keep your jewelery in bank lockers. You can also raise loans on gold for your other portfolio investments. Several options have emerged for investors to invest in gold bars, gold coins, gold funds, gold mining companies and gold mutual funds.

Factors influencing the gold price

• Bank failures
  When dollars were fully convertible into gold, both were regarded as money. However, most people preferred to carry around paper banknotes rather than the somewhat heavier and less divisible gold coins. If people feared their bank would fail, a bank run might have been the result. This is what happened in the USA during the Great Depression of the 1930s, leading President Roosevelt to impose a national emergency and to outlaw the holding of gold by US citizens.
  
  
• Inflation
  Paper currencies pose a risk of being inflated, possibly to the point of hyperinflation. Historically, currencies have lost their value in this way over time. In times of inflation, people seek to protect their savings by purchasing liquid, tangible assets that are valued for some other purpose. Gold is in this respect a good candidate, since producing more is far more difficult than issuing new fiat currency, and its value does not rely on any particular government's health.
  
  
• Low or negative real interest rates
  Gold has a long history of being an inflation proof investment. During times of low or negative real interest rates, when significant inflation is present and interest rates are relatively low, investors seek the safe haven of gold to protect their capital. A prime example of this is the period of Stagflation that occurred during the 1970s and which led to an economic bubble forming in precious metals.
  
  
• War, invasion, looting, crisis
  In times of national crisis, people fear that their assets may be seized and that the currency may become worthless. They see gold as a solid asset which will always buy food or transportation. Thus in times of great uncertainty, particularly when war is feared, the demand for gold rises.
  
  
• Production
  According to the World Gold Council, annual mine production of gold over the last few years has been close to 2,500 tonnes. However, the effects of official gold sales (500 tonnes), scrap sales (850 tonnes), and producer hedging activities take the annual gold supply to around 3,500 tonnes.
  
  
• Demand
  About 3,000 tonnes goes into jewelry or industrial/dental production, and around 500 tonnes goes to retail investors and exchange traded gold funds.
  
  
• Supply and demand
  Some investors consider that supply and demand factors are less relevant than with other commodities since most of the gold ever mined is still above ground and therefore potentially available for sale. However, supply and demand do play a role. According to the World Gold Council, gold demand rose 29% in the first half of 2005. The increase came mainly from the launch of a gold exchange-traded fund, but also from jewelry. Gold demand was at an all time record. Demand from the electronics industry is rising by 11% a year, jewelry by 19%, and industrial and dental by 21%.