Should You Buy Gold Or Keep It?
Gold is one of the most polarizing commodities currently offered on the market.
It seems like you can always find someone who is staunchly against it and someone who thinks it is the only thing worth buying.
I've rarely met people who hold opinions in the middle.
It has to be one of the most over-hyped commodities on the market.
There is no question that gold has had an amazing run over the last decade.
It has doubled in value since 2008, broken multiple price records and 24 hour gold has recently priced at over $1600 per ounce.
Even if it seems improbable, this gold mania is running at full strength.
You may be asking yourself - - should I be buying, selling or holding gold? Personally, I think you should be buying or keeping gold.
But, in order to make an informed decision, you must understand what influences gold prices.
1.
Inflation There is an increased demand for resources because of the world's growing economies.
The increased demand for resources around the world has caused the shortages to develop around the world for a variety of commodities like food and finite resources like crude oil, potable water, minerals, energy and usable land.
Gold is definitely benefiting from inflation and there's no reason to expect that it will slow down anytime soon.
Chasing all of these commodities is a bunch of printed money from the US Federal Reserve.
The dollar has lost most of its purchasing power since the Fed's creation and there's really no reason why the dollar will not just continue to fall over the long-term.
2.
Supply & Demand The balance between supply and demand is crucial in understanding how gold prices can remain so high.
Gold mining provides the largest supply of gold that is on the market.
The mining of this gold is very tightly controlled to prevent too much gold from flooding the market and forcing the price of gold to drop sharply.
Mining companies often shut down older gold mines when new mines are open because it keeps the supply consistent and low.
Gold is so valuable because it's rare -- not because it's easily obtained.
People will continue to flock to gold as long as the American dollar's reserve currency status is questioned by other countries.
More than likely, the USD is on the way out and will be replaced with other currencies.
Even China has been conducting business with other countries without using the USD -- many other countries will be soon to follow.
3.
Government No longer the world's largest creditor, the United States is now the world's largest debtor.
The US credit rating may even be lowered after Standard & Poor's lowered the outlook on the US debt from stable to negative.
The US government has lost its credibility with many countries around the world.
The U.
S.
government is losing its credibility.
Speculation that the United States will have its credit rating lowered was fueled this week after ratings agency Standard & Poor's lowered its outlook on U.
S.
debt from "stable" to "negative".
Recommended Gold Stocks: Barrick Gold (ABX), Central Gold Trust (GTU), Goldcorp (GG)
It seems like you can always find someone who is staunchly against it and someone who thinks it is the only thing worth buying.
I've rarely met people who hold opinions in the middle.
It has to be one of the most over-hyped commodities on the market.
There is no question that gold has had an amazing run over the last decade.
It has doubled in value since 2008, broken multiple price records and 24 hour gold has recently priced at over $1600 per ounce.
Even if it seems improbable, this gold mania is running at full strength.
You may be asking yourself - - should I be buying, selling or holding gold? Personally, I think you should be buying or keeping gold.
But, in order to make an informed decision, you must understand what influences gold prices.
1.
Inflation There is an increased demand for resources because of the world's growing economies.
The increased demand for resources around the world has caused the shortages to develop around the world for a variety of commodities like food and finite resources like crude oil, potable water, minerals, energy and usable land.
Gold is definitely benefiting from inflation and there's no reason to expect that it will slow down anytime soon.
Chasing all of these commodities is a bunch of printed money from the US Federal Reserve.
The dollar has lost most of its purchasing power since the Fed's creation and there's really no reason why the dollar will not just continue to fall over the long-term.
2.
Supply & Demand The balance between supply and demand is crucial in understanding how gold prices can remain so high.
Gold mining provides the largest supply of gold that is on the market.
The mining of this gold is very tightly controlled to prevent too much gold from flooding the market and forcing the price of gold to drop sharply.
Mining companies often shut down older gold mines when new mines are open because it keeps the supply consistent and low.
Gold is so valuable because it's rare -- not because it's easily obtained.
People will continue to flock to gold as long as the American dollar's reserve currency status is questioned by other countries.
More than likely, the USD is on the way out and will be replaced with other currencies.
Even China has been conducting business with other countries without using the USD -- many other countries will be soon to follow.
3.
Government No longer the world's largest creditor, the United States is now the world's largest debtor.
The US credit rating may even be lowered after Standard & Poor's lowered the outlook on the US debt from stable to negative.
The US government has lost its credibility with many countries around the world.
The U.
S.
government is losing its credibility.
Speculation that the United States will have its credit rating lowered was fueled this week after ratings agency Standard & Poor's lowered its outlook on U.
S.
debt from "stable" to "negative".
Recommended Gold Stocks: Barrick Gold (ABX), Central Gold Trust (GTU), Goldcorp (GG)
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