Gold: Time to Buy, Sell, or Hold?

December 15, 2008 | By | 2 Replies More

The price of gold is doing the rollercoaster thing again. Up sharply in the last week, then dropping precipitously in the last several days, and why? Experts tag this to the fact that it did go sharply up and then come screaming downward as everyone rushed to sell their gold at the record high prices.

Consumers are in a state of shock mixed with agony over what is going on in our economy. Daily reports of layoffs, bankruptcies, going out of business sales, and other “end of all” financial dealings are almost too much to take.

Buying and selling gold in shaky economic times are nothing new. Gold has long been called a “barometer of fear.” When people are anxious about the economy – they turn to gold and bid the price up. The two main things that make people anxious are deflation and inflation. Most think that deflation is “falling prices” and inflation is “rising prices.” Actually, rising and falling prices are symptoms. The root causes are decreases (deflating) or increasing (inflating) of the money supply.  Gold has the remarkable ability to store value in both deflationary and inflationary times.

But what about you and your situation? What about your economic worries and woes? If you are concerned about the value of the dollar, is this a good time to sell? Not really… because holding gold may allow you to hang on to the value of your investment.

Economics are cyclical in nature. Almost every country around the world has had at least one major “currency crisis” over the last one hundred years. Those that had some of their wealth in gold survived.

It’s best to think of your personal investments in gold as insurance. Do not think of gold as a way to “make money.” Do not try and “time the market.” It is better to buy gold in small amounts regularly, every month for example, over a period of time. The percentage of your total wealth devoted to gold is a personal decision and depends on your particular situation. A conservative goal would be ten percent. In times of uncertainty the “best practices” percentage could be much higher.

Gold can protect against both deflation and inflation. It would be best if we all kept some of our wealth in gold where possible. The time to sell is when the market is ripe and the value is needed. The time to hold is when the market is rocketing up and downward, like now. Let others panic, while you hang on to any gold you may have, along with its value.

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Category: Gold Prices

About the Author ()

I'm a professional journalist with several media outlets both in Los Angeles and in Washington, DC. I have covered politics, major disasters, the markets and the economy for several years. I'm interested in covering gold prices because of what it indicates about the economy and the money supply. I try to stay positive, but right now, we are in a difficult situation financially and I'll try to bring the economy and the price of gold into focus in this blog.

Comments (2)

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  1. I have gone back and forth on this for month, but a week ago I finally pulled the trigger and sold some old necklaces to get a little extra Christmas money. I got more than I even thought I could get so I don’t even care what happens to gold prices from here.

    Trace

  2. Martha Rooks says:

    That’s great, Trace. If it timed out well for you, then you rode the market perfectly for your needs.

    For investment purposes, particularly during a volatile market, it might have been better to hang onto your gold. But for you personally, this clearly has been a good thing. Congratulations on your decision and Happy Holidays!

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