There are many reasons why wise investors would want to buy gold bars during this financial crisis. When an investor decides to buy gold bars, it is usually because they seek a safe haven asset that historically thrives when mainstream financial markets flounder. Let’s face it, mainstream investments like stocks, bonds and real estate have withered away dramatically in the past few years. Back in 2001, I felt that the United States economy would begin spiraling down into a severe recessionary cycle, and sure enough here we are. Many wise investors took advantage of the opportunity because the spot price of the metal was about one third of today’s current price. This basically means that the wise investors who decided to buy gold bars back then have made around 300% profit on their initial investment while the majority of stock indexes tumbled about 50%. Big difference.
It’s important that investors understand that gold bars are considered bullion products, which basically means that there are commonly used a short-term profit-taking tool because they are a little bit riskier to use in the long-term. The reason I say that is because bullion is vulnerable to a confiscation similar to what occurred in 1933 during the Great Depression when gold was confiscated to back up the failing United States Dollar. Short-term investors who have no fear of confiscation may do well with bullion bars, but if you seek longer-term wealth preservation then your best bet may be the certified investment-grade rare coins.
John Halloran
Senior Gold Specialist – Buy-Gold.org
