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Whither Gold?

I often get asked about gold – as a safe-haven investment. And when the price is currently on a plateau (although beneath its highest level), it’s often a question of, “why should I invest in gold now, as the price is already too high”.

Of course “too high” is a relative term. It’s high compared with a few years ago, but low if the price goes to say $2,000 per ounce in the future.

I don’t give investment advice – as that is simply a recipe for “how to lose friends and alienate people”. But I am happy to tell people what I do myself – not as advice, but simply letting others know of my own thinking.

If you believe the current economic environment is on the mend, and that the so-called recession is in its last days, then it’s easy to scoff at potential gold prices of $2,000 or even $5,000 per ounce. But if the recession is a prelude to the “Greatest Depression” and our political overlords’ rash spending sprees are going to generate significant inflation down the track, then it’s obvious that gold will go up.

And that’s my own thinking. As a result I like to keep a good percentage of my cash (50%) in gold bullion.

I figure that if the shit hits the fan later this year or next year – and recession deepens, contrary to the “green shoots” theory – then gold is the best place to hold my cash.

My own bullion holdings are with BullionVault and GoldMoney – both of which are reputable and reliable. BullionVault can be used to purchase gold and store it in New York, London or Zurich – and it offers very competitive spreads.

GoldMoney has the advantage of enabling you to also purchase silver and platinum – as well as transact online with these metals to and from other GoldMoney account holders.

Both services are excellent – but BullionVault is quicker to set up, if you’re in a hurry.

Opening an account with either is very similar to opening a bank account – as you will be required to provide ID and proof of address, as well as link your bullion account with a specified bank account. But once you’ve set it up, the process of funding and withdrawing is very simple. And keep in mind, gold bullion is 100% liquid – and should you need to convert it into fiat paper money at any time, it’s as simple as going online and selling part or all of your precious metal holding in return for a wire transfer to your linked bank account.

My gut feeling (based on my reading of economic fundamentals) is gold is going to go a lot higher – and given that all the markers point to eventual inflation, buying gold is a good bet.

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  1. Charn
    July 20th, 2009 at 15:47 | #1

    Gold is in a bull market – the place to be for investments.

    Are there any discount stock trading firms that will open accounts for offshore companies so we can trade gold and commodity shares ? Especially on the Canadian Exchanges? The leverage is much more than just buying gold or silver (which can be part of your portfolio)

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