Gold - The rise and fall of the yellow metal
The gold price in the last few years has increased dramatically.
Its rise from $260 per troy ounce before the turn of the century
to current levels of over $550 per troy ounce is astonishing.
Commercial demand for gold during this period has remained
relatively flat. So has production of the precious metal. Why
then has gold seen such large price increases? Gold is seen
throughout the investment world as the ultimate safe haven. The
investment that all risk averse investors turn to when economic
conditions start looking a little ropey. Commodity prices
generally move up and down in long cycles. The past century has
seen these cycles lasting about 15 years and we are currently at
the start of another upward cycle. Oil usually leads the charge
in rising prices and other indicators include a weakening US
dollar and political turmoil around the world. Oil has certainly
started its upward run and US / Middle East relations are
strained to say the least. But one of the biggest drivers
influencing the gold price is the value of the US Dollar. "The
primary reason driving gold's bull market is the devaluation of
the U.S. Dollar." The U.S. Dollar was onece seen as the currency
of choice. US economic standing is continuing to deteriorate as
huge debts mount and interest rates are coming to the end of
their upward cycle. Enormous amounts of new dollars are being
printed by the US mint in attempts to stimulate the economy. The
more money that gets printed, the less valuable that money
becomes. This situation will always see investors looking for a
more permanent store of wealth like gold. There are a number of
ways to invest in gold. Gold stocks, futures, coins or bullion.
Stocks and futures are fairly risky as they can be quite
volatile and are exposed to market sentiment. Coins come at a
premium and storage and insurance are other issues to consider.
By far the most cost effective and safe way to invest is to buy
gold bullion from the professional market and have it stored in
a specialist vault. It has become very easy to purchase gold
bullion on the internet. Safely and at good prices. Charges are
small and your gold is kept in some of the safest vaults in the
world.