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Turns out gold really isn't such a good investment after allJoel Bainerman On January 10th, 2005 - more than three years ago, I published an article on this website entitled: "Is Gold Such A Good Investment?" During the most recent downfall of gold I finally gave in and accepted the fact that the price of gold is manipulated. I read all the websites and essays on the subject by all the experts. There was simply no reason for gold and other precious metals to have taken this recent beating. Considering the price of oil and the general uncertainty in the world's financial markets, how can it be that gold is struggling to maintain $1000 as a new floor? All the talk about how gold skyrockets in turbulent times is the biggest crock of you know what I have ever heard. On 911 the price rose $15 during the day, from $272. By Sept 30th it was trading at $292 - but by Dec 31st, it was back down to $276. When I wrote "Is Gold Such A Good Investment?" gold was struggling to find $430 as a new floor of support. That gold has gone up more than twice in the past three years, is not the issue. That it was selling for as low as $430 in January 2005 is the issue. Why four years into the "new bull market" was gold selling for under $430? In March 08 - after holding on to that $370 an ounce gold, it is worth just under three times as much? - in six years? ...but also in that equation is the devaluating US dollar, which people in the US may not feel as much as a non-American-based investor, as I am. While I won't deny I made money on my investment, it certainly wasn't anything near what many said, back in the early part of this decade, where gold was going. It never arrived there, and nobody ever considered that gold was tied to the US dollar - forever - and yet the reason many gave for buying gold was precisely the huge US debt and thus the inevitable future debasement of the currency. If any economic condition justifies a very high gold price - in the thousands - it is this one. With all the so-called disability in the world, gold should easily be at $2000 as it also supposedly provides a bulwark against devaluating/debasing currency. Yet it is struggling to climb back up to $1000, seven years into this "new bull market in precious metals." You can't beat the guys who are running these markets. Even our beloved gold and silver markets aren't the haven from the powers-that-be that we made it out to be. Time to deal with that and "move on." Might as well put your economic resources into land and homes - something that gold and silver can never replace as a useful asset to own. Apr 2008 Joel Bainerman is a former high tech journalist who left the field of high tech - due to the immorality of high tech valuations - for the more realistic world of mining stocks. 321gold |
