Investors have been buying gold in large volume since the ball dropped on 2010, as evidenced by the $38 per ounce gain that the yellow metal has made since January 1. After rallying to $1226 last year due to heavy buying by both household and institutional investors, as well as many nations’ central banks, the gold spot price cooled and dropped as low as $1079 in late December trading.
Investors have been buying gold both as a hedge against inflation of US currency and as a safe-haven hard asset that is not tied to falling paper assets and real estate values. For over 5000 years, people have preferred to hold physical gold instead of alternative fiat money, which can be quite volatile and can even become worthless in the blink of an eye. In the past, consumers have lost 100% of their buying power due to their nation’s currency becoming insolvent, so many individuals choose to store a portion of their wealth in privately held precious metals.
Gold prices tend to move in the opposite direction of the currency in which the metal is priced, so the gold spot price in US dollars has risen substantially (over 400%) since massive overprinting of our greenback began in 2001. Our government has tallied a national debt of $12.1 trillion so far, and this number will undoubtedly increase as funds from bailout and stimulus measures are poured into our ailing economy.
If you are interested in buying gold to protect and potentially grow your hard-earned wealth, or if you have already taken your position in the gold market and simply wish to check the status of your investment, feel free to get in touch with our friendly and trained specialists for the answers you seek.
Steven Martin
Senior Gold Specialist - Buy-Gold.org
