Gold Rushed: Investing in Gold

We found a great article with five reasons that you should buy gold right now. And as the title states, it’s more than just an inflation thing.

1. Gold Mine Production is Decreasing
2. Gold is Getting Harder to Find
3. Investment Demand for Gold
4. Central Banks are Buying Gold
5. Push for Gold-backed Currencies
6. Asian Demand for Gold is Exploding
7. Gold is in a Secular Bull Market

You can read more into why each of these reasons are on the top of the list at the original article.

So gold and other commodities are all the rage right now. Jim Rogers says gold is going to $2000, others say it’ll hit $3000, others still say it is over priced.

Who are you to believe?

Well you don’t have to believe us, but when we started this blog gold was below $900. That’s right, well below $900. Now it’s over $1000 and continues to climb. The dollar is weak, which has historically meant gold is a good buy along with other precious metals like silver and platinum. The stock market however, has pushed upwards for the past 2 months amid the weakening dollar, increase in precious metals and uncertainty in the economic outlook of the world.

So where do you invest.

Well, if you’re look at gold, you may want to look into the ETF GLD. GLD is an ETF that is freely traded as a stock and holds all the same value as owning a tenth of an ounce of gold. That’s cause it’s backed by the value of gold. If the fund needs more shares to trade, it buys more gold. The price of the fund tracks the price of gold by a tenth, pretty consistently.

By putting your money into this fund you don’t have to buy gold bullion directly and find a place to store these. If you have to pay to store it, and pay a premium to buy it, it doesn’t make sense to buy it that way. Buy the fund if you need to. Or buy shares in a company that mines or processes gold. But thats a whole nother story.

That’s right, we’re late on the reporting but gold is over $1000 US dollars for an ounce. Yikes.  Is it too much?  No one really knows, but all those skeptics that spoke out as it traveled down below $900 after coming near these recent highs a while back are eating their words….

Or are they?

The Washington Post has a great article on why some investors are fearing the sudden rise in gold, and also why some investors think $1000 is just the beginning. Inflation on the rise, the dollar weakening and a market that isn’t quite sure why it’s almost back at a DOW of 10,000. That’s what has investors scratching their heads and disagreeing.

One things for certain, gold and ETFs like GLD could still be good buys if we continue to see the fed printing money, and worldwide banks scooping up gold as a hedge to the weakening dollar.

While we’re not going to give a buy recommendation on gold right now we do think it’s one to watch. Nearly $300 off it’s high of earlier in the year, an ounce of gold may be the place to put your money during this possible inflationary time.

But nobody is giving any recommendations lately.  Not on stocks, nor bonds, not even on currencies. There is just wordwide uncertainty in all markets.

However, if we don’t have deflation, and in fact have a period of inflation, investors may flock to silver and gold and start buying gold bars.  Most likely though, they will start buying ETF’s like GLD and SLV.  These ETFs start buying up gold which increases the demand for gold thus raising the price.

However, the demand worldwide for gold may be reduced by lower production of all goods and services in the world, including China and India.

Either way, buying gold now, at these low prices, may still prove to be a good idea.

Buying gold right now, amidst a failed Wall Street bailout bill from congress may be the only way to safeguard your money.  Banks are failing right now and that means there is a chance, even though a small one, that you could loose your money you have with those banks.

Now if you have less than $100,000 at each financial institution you could be safe.  But, your money could be tied up for a while trying to get it back essentially from FDIC.

Investing in and buying gold on the other hand may be the safer way to go.  It’s real money. It’s what your dollar used to be based on before we went off it.  Gold still has universal value around the world.  Although there have been many other things created which could probably win you a few points in a barter, gold is the precious metal that wins out time and time again.

So don’t go throwing out that old jewelery,  don’t look past those flakes your grandma gavea you when you were younger and maybe take a look at some of the options you have out there to buy gold.  Such as gold ETFs like IAU.

Should you buy gold while a lot of analysts are calling the recent high point a peak, a bubble and no chance of getting above $1000 again? While we can’t really say what you personally should do, that depends on your personal finance situation. We can give you our opinions.

Look at it this way. Commodities are at all time highs. The world is “expanding” with globilization. Money is being made by people who have never seen a $100 in their life before let alone thousands. With that money comes the ability to buy items like jewelry, computers, and other non-essential needs (although computers are becoming increasingly essential.)

Oil is rising. Although the bubble may burst, this is highly unlikely considering that the whole world, as mentioned, is expanding and the need for oil in China and India is helping drive costs. If oil goes up, other commodities rise, the need demand for precious metals doesn’t dwindle, why would it not climb?

Inflation, Inflation, Inflation. Inflation is driving up the cost of a lot of goods. Do you really think the price of milk or a candy bar is going back down? Although I realize that these aren’t perfect comparisons you get the idea. The value of a dollar is going down, prices of tangible goods are going up. If dollars are being produced more and more to cover our nation, is the government going to start pulling more twenties out of circulation once the economy recovers? Probably not.

There are probably a bunch more reasons why investing in gold is a good idea, even at this peak. But then again, everyone’s personal finance story is different. So choose where you money goes wisely. Gold may not be the best investment for everyone.

Buying gold right now might seem crazy to some. The price has been rising rapidly, oil and other commodities have been shooting through the roof, and theres talk of an oil bubble about to burst.

So what is the common investor to do?

If you ask us, we would say buy gold. Why? Inflation is here, demand is up, and gold has dropped way off it’s high from a few months ago. Being able to invest in these times might be a great idea to even the most timid investors. And you don’t have to go spending thousands on gold bullion. You can buy just an ETF and get in on the action like that.

As we’ve suggested in the past you can buy a gold ETF like IAU from iShares, a great ETF company that provides all sorts of sector ETFs like precious metals and other commodities.

Once again, the price of $870 or so per ounce seems like a great price to buy at.

The dollar finally had a little bump yesterday against the Euro which sent precious metals retreating after making large moves last week. Oil has been trying to help gold buyers regain some confidence in the metal but to no avail.

Gold, for the second straight day, fell $20 plus per ounce in trading. Gold stands at less than $870 per ounce while just Friday it closed at over $900. The Fed signals which have been making gold prices bounce around are at it again. Today with talks of a fed rate hike on the horizon, gold was not good for those invested.

However, those looking to purchase gold may be able to buy gold at a quite a discount to recent highs. Those willing to risk more possible pullbacks could be able to get into gold now and wait for the next run-up. Although we can’t be sure there will be another precious metals rally, the erratic market would tend to lend to these types of spikes in safer investments like gold.

Buying Gold may not be as bad as we reported that it was in this article on fed cuts affecting gold prices. Gold jumped nearly $25 on Friday.

Gold is now back over $900 an ounce, and as analysts continue to predict oil heading higher, gold may still be a great buy for those looking to get into a precious metal that will continue to be in high demand for years to come.

We report all too often on this and our other precious metals network blogs that this is a great time to buy precious metals like gold and silver. Why, because inflation is here, oil is rising, and the world economy is growing at a faster pace than ever before. Buying into metals that provide industrial needs as well as ornamental products is most likely going to prove to be a great move.

The Feds may not be able to affect this precious metal as well as some analysts thought.

The price of gold retreated today on the Feds announcement that they were most likely done cutting rates. This announcement came while oil continues to rise and the market remains shaky.

Gold, which is one of those safe havens for dollars, especially when the dollar is weak as it is now, may suffer at the hands no more rate cuts. However, this might only be temporary. Oil is continuing to rise sparking talk of a recession and everyone is feeling the pain of inflation and rising food prices. So why won’t gold follow suit.

Although this is a blog on gold, you have to look at as a commodity slice of the whole market. Prices are going up on all commodities because there is a rising demand for all commodities while there isn’t as much a supply. This means higher prices.

The FED may be trying to curb inflation but will they kill golds rise? I’m guessing not. Gold may be at great price to buy right now.