Gold made simple

Why Buy Gold?

2010-03-30T01:27:00.000-07:00

There are various factors which continue to push up the gold price and make the case for now being the opportune time to buy gold. Two major ones include high levels of sovereign debt leading to currency debasement and increasing inflation, both of which have historically led to past gold price increases.

When a government is faced with a financial crisis, such as the global one of recent years, the obvious possible solutions are to cut costs, increase taxes or to borrow or print more money. The US, Greece and Japan are all at present experiencing such problems. They are keeping interest rates low in order to keep up with their present debts. However as their debts are become unmanageable they may see themselves forced to print more money which will devalue their currency.

So it can be seen, at present paper currency is not seen as a sound investment. The best sound asset is gold, the logical choice. Since gold moves inversely to the US dollar it is the wise safe haven for investment in today’s present economic climate.

Gold - What's Its Attraction?

2010-03-29T06:28:00.000-07:00

The chemical symbol for gold is AU from the Roman goddess of dawn, Aurora. Gold is one of the first metals to be discovered by man around 5000 BC. This soft metal with a bright yellow lustre has been held in great esteem throughout history and is still highly valued even today, being mined in 60 countries around the world.

Gold can be traced back to ancient Egypt with its exquisite objects and artefacts which adorned tombs of the Pharaohs, the famous of which being Tutankhamen whose tomb was discovered in 1922 by Howard Carter and Lord Carnarvon. Examples of gold used by skilled craftsmen can be seen on relics from countries such as, Greece, China, Arabia and Mexico with Aztec and Inca artefacts.

Although gold today has many uses it is predominantly used as currency. Many countries buy gold as a safety net against fluctuating currencies and any economic and political crisis. Gold is bought in the form of bullion, coins or certificates.

Since it was first discovered, gold still remains a status symbol, a symbol of wealth and can dictate your place in society. Even a small gift, such as a pair of gold earrings, is perceived to special and valued. Gold will always hold its special appeal for generations to come.

The World Gold Council

2010-03-25T02:06:00.000-07:00

The World Gold Council recently released figures ranking 133 countries in order of the amount of gold holdings they possess.

Not surprisingly the USA maintained its position at the top of the rankings with 8,133.5 tons of gold holdings. It is suggested that the US possess so much gold as a safety net which allows them to use it in times of emergency, such as war. Following the US is Germany with the International Monetary Fund (IMF) ranked third, holding 3,406.6 and 3,005.05 respectively.

India has voraciously been seen to buy gold from the IMF last October moving them up the list to 11th position. Frantic buying was also noticed in Asia, in particular China who over the past year has bought 454 tons of gold. One country which still remains apprehensive about buying gold as a hedge against the fluctuating US dollar is Korea; they prefer to invest in US bonds. A finance Minister Official claimed that the government is "closely watching" other countries before they consider whether to buy more gold due to the fluctuating price swings. Korea has dropped to 57 in the rankings due to its cautious policy.

Greek Debt Crisis

2010-03-23T15:08:00.000-07:00

Gold dropped slightly at the close of market yesterday, retreating from $1,105 at the start of the day to $1,095.

This can be seen as just a temporary reaction to the doubt surrounding the Greek debt crisis. Hopes that the situation might be resolved at this week’s European Union summit remain strong. President of the European Commission, Jose Manuel Barroso encouraged the euro zone countries to assist Greece and come together to develop an aid package which in the long run, will benefit all of them.

Germany’s Chancellor Angela Merkel strongly opposes this view stating that Greece should not receive aid from the EU. She spoke on behalf to the general public in Germany, the majority of who share the same opinion.

Market analysts suggest that the current lowering of the price of gold is only a temporary setback in response to the uncertainty of Greece’s financial problems. They go on to recommend now is the time to buy gold in anticipation of the market gaining strength, which as predicted will.

Gold Market Summary

2010-03-22T09:56:00.000-07:00

Gold ended the week slightly lower at the close of market on Friday at $1107.60 in comparison to the euro which rose 2.2% to 818.

With the dollar showing sign of gaining in strength recently, gold prices have remained resilient. Speculation appears to be fuelling the recent flurry to buy gold as a hedge against paper currencies.

India’s Central Bank lowered interest rates this week in an effort to slow down their high inflation rate which made for some sell off of gold. The resulting dip in the gold prices, however, saw Indian jewellers grabbing the opportunity to buy gold in preparation for the up and coming wedding season which begins in April.

Gold Verses Currency Investment

2010-03-19T11:47:00.000-07:00

Investors traditionally buy gold as a hedge against the fluctuating U.S dollar, but with the recent economic downturn the price of gold is also being affected by the value of other currencies such as the euro and the pound.

With increasing sovereign debt from countries like Spain, Greece and Portugal and the high risk element in paper currencies, now seems the opportune time to buy gold to protect against the volatile global economy.

Jim McDonald of Northern Trust suggests that with the poor credit rating of the U.S and other countries and as their debts mount "this raises the question about the value of the paper currencies issued by these countries". The smart move, analysts suggest, would be to buy gold.

Pot of Gold

2010-03-18T16:08:00.000-07:00

With yesterdays St Patrick’s celebrations over for another year, I wonder how many people had the luck of the Irish and found that elusive pot of gold!

As Nations around the world slowly start to recover from the global economic crisis which has devastated many economies, investors are being encouraged to see gold as the ultimate safe haven for their money. With the fluctuating U.S dollar and speculation that the price of gold will soar in the future, now is the time to buy gold, the intelligent investment.

Your dream of owning gold could so easily become a reality. Gold can be purchased as either a certificate, showing proof of ownership or as physical gold, in the form of bars/bullion or coins. Owning gold as an investment, satisfyingly allows you to bask in the knowledge that you actually own your very own pot of gold.

With gold forecasts looking optimistic and increased production of this precious metal, now is the time.

Federal Reserve Keeps Interest Rates Low

2010-03-17T11:31:00.000-07:00

In the U.S the price of gold soared yesterday to $1,128 as the U.S Federal Reserve announced there would be "no change" on interest rates. In Europe and the UK the gold price rose by 1%.

The Federal Reserve hopes to keep interest rates between 0.00% and 0.25% for an “extended period of time” with an aim to keep fighting deflation. This came as no surprise to financial markets. The U.S economy seems to be showing signs of recovery but officials however still describe the start up housing market as being at a “depressed level”.

Low interest rates have reduced the value of the dollar in comparison to other high yielding currencies. As the dollar goes down the appeal of gold is boosted. Now is the time, analysts recommend, to buy gold as a hedge investment.

Gold Up as Rand Gets Stronger

2010-03-16T12:39:00.000-07:00

Good news for South African gold companies and investors as the price of gold and platinum continued to rise yesterday. This can mainly be attributed to the Rand strengthening against the dollar.

Gold and platinum exports make up a quarter of South Africa's export earnings so they play a vital role in the country’s economy. Over recent years the gold industry in South Africa has been hit hard by the cheaper gold on offer from Australia and Russia. The rand in recent years has also lost its value against major currencies.

The gold price rose by 8% yesterday. Many analysts see this as a reflection of investors preparing themselves for the announcement by the U.S Federal Reserve today on the interest rate.

Gold Remains Strong

2010-03-15T14:58:00.000-07:00

Despite sliding a little this week, gold still remained steady at the close of the market last week at $1.112. We also saw the dollar dip slightly and rise, as gold moves adversely to the dollar this influenced the price of gold.

Gold stocks are beginning to rise in value again. This is possibly due to more Gold companies increasing their gold production, in order to replenish their reserves, as demand for gold intensifies. Kinross Gold announced they were buying Underworld Resources, which will possibly lead to further speculation of mergers on the horizon.

Canadian based gold miner Gold Corp announced its fourth quarter earnings where optimistically up on what was previously expected. As gold production increases in response to global demand, analysts suggest that now is the time to jump on the bandwagon and buy gold while you can.

Gold Bullion

2010-03-12T10:22:00.000-08:00

Despite the price of gold lowering in recent days, the general consensus is that this is only a temporary set back and that now is the time to buy gold bullion as a safe haven against the current global economic uncertainties.

Gold production has increased significantly over the past year with many gold companies investing heavily in new mining developments around the world. It is this demand which is partly fuelling the current gold buying frenzy.

But are we in a "gold bubble" as some analysts suggest? With gold prices reaching record highs, demand for gold increasing and gold being increasingly be used as a hedge investment, if a bubble does exist it doesn’t look like it’s going to pop any time soon.

Gold Holds Its Value

2010-03-11T13:12:00.000-08:00

Gold remained steady at the close of market yesterday. It appears down 9% on the week but optimistically it is up 6% for the month.

Despite the dollar’s increase in strength the price of gold is still faring well. The market remains bullish as the global economy appears to be picking up, which in turn is still encouraging investors to buy gold.

The slight dip in the gold price, analysts speculate, could be due to Chinas recent announcement that they would not buy gold on the open market for the foreseeable future. How far this affects the gold market appears to be seen.

Australia Rated as World's Second Largest Gold Producer

2010-03-10T08:53:00.000-08:00

Figures out this week show that Australian gold output rose by 14% in the last quarter, as global demand for gold increases. Investors appear to be opting to buy gold as a safe haven against current economic uncertainties.

This increase in production makes Australia the second largest gold producing country, with a total output of 227 tons. China still remains the leader with an impressive 314 tons of gold produced last year. USA was ranked third, closely followed by South Africa.

Australia’s success can be mainly attributed to the opening of the redeveloped Boddington Mine in Western Australia, owned by Newmont Mining Corp. With more mining developments planned, an increased demand worldwide and the positive forecast of gold prices, gold remains a significant contributor to the Australian economy.

Gold Outlook Seems Healthy

2010-03-09T12:21:00.000-08:00

Gold sales are picking up speed as more investors are looking to buy gold as a safe haven for their reserves as opposed to paper currencies.

Currently, analysts are interested in the new high gold is reaching which is reflected in the present bullish market atmosphere. Global excitement is being generated by the euro gold prices exceeding expectations and the weakening dollar, which in turn is pushing gold higher.

Over the weekend France’s President Sarkozy announced that Greece’s euro zone partners would continue to support them over their ongoing debt crisis. This confidence allowed gold prices to pick up as investors saw gold as a safe hedge investment.

Analysts predict that gold’s outlook appears healthy. Now would be a sensible time to include gold in your investment portfolio. The future of gold looks positive for the time being, making it a safe bet for a decent return.

Brown Gold Fiasco

2010-03-05T10:41:00.000-08:00

Recent figures suggest that Gordon Browns decision to sell off 60% of the UK’s gold reserve between 1999 and 2002, cost the nation somewhere in the region of £5 billion in today’s market.

Despite the Bank of England’s misgivings and advice not to sell 400 tons of bullion, a determined Brown continued to do so, even though the gold price was at an all time low at $275 an ounce.

Critics claim that announcing the sale in advance was a major economic incompetence on the Governments part, resulting in the market becoming depressed and gold selling at such a low price. Ironically, if Labours policy at the time was to buy gold, due to rising gold prices, the nation would not now be facing such glum statistics.

Presently, with the Government showing interest in selling off some major public assets, they must “first prove that they have learnt their lesson in the gold fiasco and the Prime Minister must be held accountable”.

Chile's Gold Mines Declared Safe

2010-03-04T08:00:00.000-08:00

Following the devastating earthquake in Chile on Saturday, gold companies, who have operations there, have reported that their mines appear to have suffered little or no significant damage.

The earthquake was of a magnitude of 8.8 and resulted in the death of at least 700 people. Vancouver based mines Barrack Gold and Kinross both confirmed that their mines largely remained unscathed due to the fact they are based in the north of the country and the epicentre was in the south.

Gold in Chile is mainly mined off the back of copper, which forms the basis on the mining industry. Chile is the world’s largest producer of copper and ranked 16th in the world for gold.

With gold and copper mining in Chile remaining relatively unaffected by the earthquake, the main problem that faces companies is the county’s damaged infrastructure. Problems, such as inaccessible roads and shortage of power will not allow the mines to run at their full operational capacity. Analysts suggest this current situation may push gold prices up so now is the time to buy gold.

Newcomer to the Gold Market?

2010-03-03T09:44:00.000-08:00

When first dipping your toe in the gold market it is essential to have a basic grasp of the day to day workings of the market and its terminology. You need to understand just what you are investing in.

GOLD is a malleable yellow element found in veins or deposits, which is then mined. It is sold in BARS/BULLION and weighed in TROY OUNCES.

The GOLD STANDARD is the monetary system used to convert money into gold. However, gold bars must conform to the GOLD DELIVERY STANDARD before they can be sold. GOLD CERTIFICATES are issued to prove you own the gold bullion; you don’t have to hold it physically.

Gold is traded on the GOLD MARKET. When analysts expect prices to fall they refer to the market as a BEAR market and when they raise, a BULL market. Buyers make a BID to buy gold and when a seller offers to sell it is referred to as an ASK.

Sterling Gold Price Rises

2010-03-02T07:29:00.000-08:00

The pound fell 1.6% yesterday against the dollar to below $1.50, making a fall of 7% since the start of the year.

The weak pound is good news for the gold price in sterling which hit a record high of 753.69 pounds an ounce.

The pound appears to have a 10 month low due to fears the General Election, scheduled for later in the year, will result in a hung parliament. This is when no party has an overall majority of seats. International investors in turn, would be uncertain how the large UK budget deficit would be resolved and they could play safe and move to another currency.

With the ongoing political uncertainties surrounding the forthcoming General Election, analysts suggest that the sterling gold price could continue to rise making now an opportune time to buy gold.

The Gold Market to Date

2010-03-01T10:48:00.000-08:00

After dipping midweek, due to the dollar gaining strength, gold ended the week in a similar situation to the beginning on $1,100.

The fluctuating dollar was seen as a reflection of the Federal Reserve in the U.S, hiking up the discount rate. The discount rate is the interest rate the central banks in the U.S charge to financial institutions.

In Europe the euro still remained weak due to the ongoing Greek debt crisis. This further highlights the fact that the euro appears to have a fundamental problem.

The World Gold Council (WGC) reported this week that gold demand has fallen by 11% on last year but critics say that the figures don’t reflect the increase in demand from Industry and the jewellery market.

Gold bullion analysts during last week further predicted a gold boom, encouraging investors that now would be a good time to buy gold. With more and more countries like China, India and Russia purchasing gold bullion as an alternative investment to the U.S dollar, this can only further give food for thought.

China Rumoured to Buy Gold

2010-02-26T08:00:00.000-08:00

“People don’t trust the dollar; they don’t trust the euro, so the only way to go is to look at alternatives such as gold. It’s a safe haven”. This view expressed by Bernard Sim, of MKS Finance in Geneva, is a reflection of the views of many gold analysts.

There is a lot to be said of his sentiments. As the dollar fell against the euro yesterday, gold prices saw a slight rise. The euro zone situation is still a constant presence and if Greece fails to put in place the suggested objectives, the euro will still remain unstable.

The big rumour circulating the market at present is that China will acquire over 191m tonnes of gold from the IMF gold sale. If this rumour turns out to have substance then China would emerge as a powerful force in the gold market. It is suggested that gold prices would initially take a dip but would continue to rise, making now a crucial time to buy gold.

Gold Bull Market

2010-02-25T11:37:00.000-08:00

Gold analysts appear to be in agreement over this one, the gold market at present can be confidently be referred to as a bull market.

To understand this it is necessary to differentiate between the two. A bear market is seen through pessimistic eyes. If the market falls by 20% over a period of time, we have entered a bear market.

A bull market in comparison reflects a long upward trend of price movement. The market shows confidence and this is encouraged by more people buying, which in turn pushes the market up.
Analysts go on to suggest that there is no “gold bubble”.

Gold prices have risen due to the current economic circumstances, which could remain for the same for the next few years and keep pushing the price of gold up. They recommend that now is the time to take advantage of what is to come and buy gold.

Solid Reasons to Buy Gold

2010-02-24T08:08:00.000-08:00

Many catalysts are responsible for igniting recent interest in the gold market. With the current global economic crisis in full swing, more compelling reasons for investing in gold are surfacing.
Gold has stood the test of time. It is regarded as highly desirable the world over. Not only does it respond well to supply and demand but it reflects the markets sentiment, making gold a safe haven for investors.

This week the market has seen gold prices rise and then take a dip, making now an ideal time to buy gold. Countries, such as China and India, have revealed plans to diversify into gold. With the U.S looking at possibly another round of deflation, in order to reduce the burden of debt, forecasters predict gold prices look set to rise in the future.

Weighing up the overwhelming advice from gold market analysts and the compelling arguments they make, having gold in your investment portfolio makes common sense.

Now is the Time to Jump on the Gold Bandwagon

2010-02-23T10:09:00.000-08:00

Brokers and analysts are urging people to buy gold bullion now before the current level of supplies run out and if predictions ring true, the price of gold increases.

Sales of gold bullion have improved globally in recent months. Countries such as China, India, Russia and Japan have all been seen to be investing heavily in this precious metal. With the unstable U.S dollar they are seeing gold as a hedge investment for the future.

Perhaps it is this bulk buying which will also contribute to the anticipated increase in the value of gold. Analysts feel confident to predict that the present bullish gold market will stay this way for the foreseeable future.

So in the long term, the gold bullion market will be directly affected by supply and demand. At present, demand is on the up. As precious metal dealer Andrew Schectman put it, “the best days are ahead for anyone who owns gold”.

China to Invest in Gold

2010-02-22T10:53:00.000-08:00

With the uncertain future of the U.S dollar, China appears to be showing an increased interest in investing in gold as an alternative option to holding dollars.

This is evident when we look at data, recently released bythe U.S Treasury, which shows that China has sold off $34 billionof its U.S Treasuries (government debts issued by the U.S in the formof bonds, notes or bills) since December 2009, which suggests Chinaslack of faith in the U.S dollar.

Also with China's recent decision to acquire more gold mining companiesand their move into ETF's (Exchange Traded Funds), this could also signifythat they are looking to diversify into gold.

In the long term it appears that China is trying to possibly cash in on the currentglobal economic crisis. Its move to buy gold bullion at an increasing rate, wouldindicate that investing in gold, at this point in time, would be a wise option.

What’s The Real Value of An Olympic Gold?

2010-02-19T06:59:00.000-08:00

With the Vancouver Winter Olympics well underway, curiosity turns to intrigue as to how much is an Olympic gold medal is really worth.

Surprisingly, gold medals are not required to be solid gold bullion. Ironically they start off as silver and are coated in gold, with only 6% of the medal required to be gold. The Vancouver Olympics are the largest medals yet, weighing around 500 grams, 100 mm in diameter and 6mm thick.

In today’s current climate, the 2010 Winter Olympic medals are valued around £320, making them the most expensive gold medals yet. But should medals be valued in monetary terms or just seen as a symbol of all the hard work and dedication the athlete has endured. As the price of gold continue to rise, as an investment, athletes should really see that to buy gold bullion would be a better financial option!