An Exciting Time for Gold Investors
September 1, 2009 by Martha Rooks
Gold futures are up again. Like a yo-yo that never fails to go, always on a string, they are moving again. Investors are still rushing to gold, seeing it as the safest place to store their wealth.
The summer has seen a rise in the price of gold, traded on international markets. With the U.S. government printing more money in an effort to boost the world out of recession, the gold markets show no signs of cooling, unlike the currency markets which continue to vaccilate.
“Investors are becoming increasingly keen to buy gold. Notably, inquiries are coming from small, first time investors as well as seasoned financial experts. Recommendations from financial advisors are fueling a rush to commodities and in addition, many people are insuring up to 40% of their investment portfolio is in physical gold,” according to Jason Cozens, Managing Director of Au.
Financial experts, some of whom have been reluctant to put their clients in precious metals in the past, are now flocking to the yellow metal. Gold has always been a safe haven, and a recession proof investment.
Currently in the United States, consumers are seeing deflation. But with the Treasury Secretary ordering additional printings and the release of additional dollars into the market to pay for the stimulus package and its myriad of projects, gold may be the safest of all prospects now and in the long term.
That’s because as a rule, it behaves in a trajectory that is inverse to the value of the U.S. dollar. In other words, as the dollar falls, the price of gold rises.
Reaching a high mark around $1000 per ounce earlier this year and opening the week at $956, one could wonder exactly how much higher it will go. Or conversely, how much profit an investor could reap by wisely investing in a physical asset.
The demand to buy gold by ordinary individuals is now said to be so strong that novel ideas for selling it are taking off. Figures released by the World Gold Council show that total demand for gold, including gold bullion, rose 1,016 tons in the first quarter of 2009, which represents a 38% increase on last year’s figures.
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