Reasons to say YES to Gold
The dollar is weak and getting weaker due to national economic policies which don't appear to have an end. Gold price appreciation makes up for lost interest, especially in a bull market. The last four years are the beginning of a major bull move similar to the 70's when gold moved from $38 to over $800. Central banks in several countries have stated their intent to increase their gold holdings instead of selling.
All gold funds are in a long term uptrend with bullion, most recently setting new all-time highs. The trend of commodity prices to increase is relative to gold price increases. Worldwide gold production is not matching consumption. The price will go up with demand. Most gold consumption is done in India and China and their demand is increasing with their increase in national wealth.
Several gold funds reached all-time highs in 2007 and are still trending upward. The short position held by hedged gold funds is being methodically reduced. U.S. government economic policies over the past decade have systematically projected the U.S. economy down a road with uncontrollable federal spending and uncontrollably increasing trade deficits.
Both will cause the dollar to lose in international value and will increase the price of alternative investments, such as gold. With the recent devaluation of many international currencies, the U.S. dollar was the international safe haven of last resort. We are seeing signs of this ending due to many financial factors, the most important one being a falling dollar. There are over One Trillion dollars ($1,500,000,000,000) of U.S. debt owned by foreigners which could be repatriated under certain conditions.
This could cause a major decline in the value of the dollar and a soaring gold price. If you believe in 'buy low, sell high', gold is still low, but climbing.
Reasons to say NO to Gold
Gold doesn't pay income or interest. Except for the last five years, gold has been in a bear market after a peak in 1980. Central banks have tons of bullion which they occasionally threaten to sell.
If you don't count the last five years, gold stocks have not done well. Since gold funds have made big moves over the past five years, it's time for them to drop back. Your broker probably won't recommend gold funds.
As you can see there are many more reasons to say YES to GOLD!
Houston Coin & Bullion is not affiliated with any government-minting program or government distribution of gold, coins or bullion. This Information is intended for educational purpose only and is not to be used as investment advice or a recommendation to buy sell or trade any asset which requires a licensed broker.
Houston Coin & Bullion, principals, and representatives DO NOT guarantee a profit or guarantee that losses may not be incurred as a result of following its gold or bullion and coin collecting recommendations, or upon liquidation of gold, coins or bullion purchased through Liquid Bullion Coin And Collectibles.