Gold Rushed: Investing in Gold

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.

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.

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.

Gold prices are down, dollars per ounce. The price of gold is around $880 per ounce and has dropped off dramatically in the last two months. For investors who haven’t gotten in on this run-up yet that could spell a great buying time.

We’ve already seen the price of gold make huge strides toward $1000 per ounce and now with gas in the US creeping over $4 per gallon, the price of gold could follow up just the same. A new article, on the front page of money.com talks about .

Now may be the best time to buy into the gold rush before it happens. One of the easiest ways to get into that is to buy a gold etf like GLD. It’s easy and not as expensive as buying and storing gold bullion.

Gold, the most sought after metal in the world is sought not only because of its luster but also for the various other properties it holds.

Properties of Gold

Gold is a good conductor of electricity and heat. An important property of gold is that it is resistant to corrosion: it does not react with air or any reagents.

Gold has the metallic properties of being malleable and ductile. The property of malleability lets gold get hammered into thin sheets without breaking. Its ductility allows gold to be drawn into thin fires. Gold can be melted and stored in different shapes. It also has the ability to mix with different metals and become alloys.

Applications of Gold

Jewelry: Gold has always been thought of as the pure metal. The brilliant yellow and the excellent luster have drawn people towards it for centuries. More than three-quarters of the world’s gold is consumed as jewelry. Gold’s ductile property makes it an excellent choice for casting jewelry. Gold combines excellently with silver, copper, platinum, aluminum, nickel, zinc, palladium, and cadmium to deliver a variety of differently-colored alloys.

Electronics: It may come as a surprise to know that the most precious ornamental metal also finds its use in electronic equipments, thanks to its electrical conductivity and resistance to corrosion. A certain amount of gold has invaded the information technology and electronics industry, and rightly so. Gold can be traced in your daily electronic and digital equipment like cell phones, computers, calculators, televisions, credit cards, and digital equipments. Gold comes to the rescue when handling very small voltages. You would argue why silver and copper cannot be used in such devices. Here, gold scores a brownie point because of its resistance to corrosion.

Engineering: Gold is used in numerous engineering applications as a lubricant. Gold is used in thermocouples and potentiometers. Gold is also used in architecture as glazing material for buildings; it helps in keeping the buildings well heated and ventilated. Gold has also found limited use in industrial brazing.

Medicine: From being present in surgical instruments to providing diagnostic support and cure in certain diseases, gold has gold has found some place in medicine. Certain compounds and isotopes of gold are used in the treatment of rheumatoid arthritis, Lagophthalmos, and some cancers.

Dentistry: Being biocompatible and chemically inert, gold serves as a great solution when the human body’s need for a metal in the mouth! Gold and its aloys are safe for the human body, making them the preferred choice for filling in cavities, inlays, crowns, and bridges.

Miscellaneous: Gold also finds its use in photography as a printing medium. Though tasteless, Gold has now entered the gastronomical zone, being served in food. In countries like Japan, tea, deserts and cocktails are now being served with gold dust and flakes! Apart from being ornamental, gold is being used in the beauty industry to aid beauty. Gold facials have gained popularity across nations. Some cosmetic companies are adding gold in their products. The ductility of gold has founds its use in embroidery as well.

A great way to get into the precious metals craze going on right now is to look towards mining and producing companies dealing with precious metals such as gold. One of those gold mining stocks is Agnico-Eagle Mines Limited (NYSE:AEM) located out of Toronto, ON. At the time of this writing AEM was trading at just over $70 per share with a market capitalization of $10 billion.

AEM produces gold through it’s gold mining operations located in northwestern Quebec as well as mine construction projects in that same location. Agnico-Eagle is also mine construction projects located in Finland and Mexico with exploration operations in all of those countries as well as the United States.

Over the past year the companies stock as increased 86% fueled no doubt by the huge climb in gold prices. The company claims large potential for growth through press releases found on it’s website where Agnico-Eagle boasts that its largest mine is the 100% owned LaRonde mine. LaRonde is Canada’s largest gold deposit in terms of reserves. This has allowed AEM to have low operating costs and provide the company with other previous metals such as silver, zinc, and copper which are byproducts of the mine. Development at LaRonde is expected to keep the mine going through 2020.

Other gold mines the company is constructing hope to add to this growth and include Kittila in Finland and Meadowbank, Lapa, and Goldex in Canada. From 2006 to 2007 Agnico increased it’s gold reserves by 33% and looks to increase those reserves by 5 five over the next 2 years. They also are looking to produce over 350,000 more ounces of gold this year than they did in the previous year.

Their stock, however, appears to show this growth already factored into the price as it trades at a P/E ratio of 69. Is this a case of investors loving the stock because of it’s potential growth, or investors joining the bandwagon of buying gold in a bull precious metals market.