A small number of individuals decided to buy gold for investment purposes on Thursday, which aided the gold spot price in its upward movement of $8.90 by 2:30pm EST. Gold is presently valued at $1054.50, and the precious metal found a new plateau of $1062 earlier this afternoon. Americans buy gold for investment purposes when they believe that our dollar could become extremely devalued, and when various economic indicators give them an immediate need for added wealth security. White House economists say that our recession may be easing, but some investors believe that current economic readings point to a harsh future for our economy during the next few years.
Massive job cuts have been the norm within our country for the last two years, and even some of our government officials admit that elevated unemployment levels are here to stay. Federal Reserve Chairman Ben Bernanke said last week that even if our economy was able to grow by 3% for several consecutive quarters, our national unemployment rate would still be above 9% by 2011. Many Americans fear what the figures will be if our economy does not grow by that lofty 3% per quarter guesstimate.
“Unemployers” eliminated 263,000 jobs in September, and more layoffs were announced this week. A major industrial manufacturer announced that they will terminate their Iowa-based operations, and California reported that over 4000 more jobs were lost in September than in August. Our West Coast has been especially hard hit in the construction and service industries, which could be a contributing factor to the rapidly dropping home prices in that area. Analysts encourage investors who are looking for a back-up plan (in case the newly popular real estate bubble bursts) to consider an investment in a liquid asset like cash, a certificate of deposit (CD), or precious metals. Those who buy gold for investment purposes appreciate its global liquidity, and the historic stability that gold offers is unmatched by any fiat currency.
Steven Martin
Senior Gold Specialist - Buy-Gold.org
