General Question

arllyn's avatar

5 reasons why you should buy gold?

Asked by arllyn (19points) July 15th, 2008
Observing members: 0 Composing members: 0

4 Answers

SquirrelEStuff's avatar

Inflation, inflation, inflation, inflation, inflation!!

If you had an ounce of gold in 2000, you could buy 217 gallons of gas. If you had an ounce of gold in 2008, you could buy 230 gallons of gas.

But according to SOME, devaluation of the dollar has nothing to do with the price of gas.

marinelife's avatar

This source provides you with at least five reasons.

1. “If the stock market is doing poorly and the dollar is weak, it’s a great hedge.”

2. So for investors concerned about a pullback in the stock market, the strength of the dollar or increased political turmoil, a moderate investment in gold can be wise _ if 4. they’re willing to stomach possible volatility.

3. Even if demand increases, adding to supplies has become more difficult. Production has fallen from years past because it now takes longer to win approval for new mines and to shepherd them into production in part because of environmental concerns.

4. Holmes also noted the gold often moves in a similar direction as oil; recently oil prices have climbed amid increasing demand, in part from developing countries like China and India.

5. “I’m very bullish from the demand viewpoint,” said Frank Holmes, chief investment officer at U.S. Global Investors Inc. He contends rising income in developing countries with a cultural affinity for gold _ particularly India where it is widely used in jewelry _ is a good sign for gold demand.

There are some caveats. Volatility, also over the long-term the price of gold has not kept pace with inflation over the last 30 years.

SquirrelEStuff's avatar

It all makes sense to me now.. Marina gets her news from FOX.

marinelife's avatar

@chris6137 If you checked the link, you saw that the story and its content was from the AP.

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