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Go for the Gold?

Gold: A Solid Investment?

Gold: A Solid Investment?

Unless you’re living under a rock, you’ve noticed the downturn of the economy and resulting wild swings of the stock markets. Investors have been fleeing in droves, seeking shelter and safe havens for their money, but still hoping to pick off something of real value that will possibly give them a return. Hundreds of thousands of those investors are hoping that gold will be the answer.

“People are scared. Gold has become a safe haven,” said Michael Maroney, a vice president of sales at gold dealer Monex Precious Metals in Newport Beach, Calif.

But the U.S. Mint threw a monkey-wrench into the matter in late September, by temporarily halting sales of its popular American Buffalo 24-karat gold coins because it can’t keep up with soaring demand as investors seek the safety of gold amid economic turbulence.

At the time, Mint spokesman Michael White said that the sales were being suspended because demand for the coins, which were first introduced in 2006, had exceeded supply and the Mint’s inventory of the coins was depleted.

The Mint had earlier cut sales of a one-ounce coin in August with an allocation program for designated dealers. The Buffalo coin is now in a similar program.

“Due to the extreme fluctuating market conditions for 2008, as well as current market conditions, gold and silver demand is unprecedented and the demand for platinum is unusually high,” the Mint said in a memorandum released to authorized purchasers.

And prices are skyrocketing accordingly. Is this a good time to buy gold? (We’ll be talking about the families digging out heirlooms to sell for their gold in the future.) That depends on your investment strategy. Most investments, including those in the stock market, are a good investment right now if you have the time to hang on to them and let their value build in your portfolio. Because buying gold is like any other investment product; you pay a premium for buying from a reputable dealer. You will need to hold onto the gold in order to realize a return on the investment.

The best way to buy gold or jewelry isn’t usually as an investment. The way to get a great investment and price is to buy something you look forward to and love owning. The value is in enjoying it every day or as often as possible because the return on that investment comes anytime you choose to look at it.

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