Gold as an Investment: It's Never Been Worth More but Will the Prices Rise or Plummet?

A day ago gold hit a historic high at $ 1,194.5 per ounce. The trade is being driven beyond all reason by by central bank purchases. All of this has caused investors to purchase heavily. This high in prices and the Dubai incident had investors cashing in fast which sent gold on a slide. Many have felt that investing in gold at this time is a good idea but yesterday reality and the Dubai's debt drove a few investors to rethink this. However the Dubai incident will be unlikely to affect the rise in the precious metals that we have been seeing and investors will continue to drive prices even higher. But what goes up will come down so the question remains, is gold a good investment so late in the game?

The United States announced last week that it would not be selling American Eagle gold coins any more due to the shortage. This has made even coin collectors scramble to purchase the coveted fifty dollar pieces.

Many people are wondering if gold is a good investment at this time. Lately gold is being considered heavily as an investment by stock experts and analysts. After the down slide a year ago of the stock market, banks declaring bankruptcy and an economy in serious crisis many are wondering if gold is perhaps is a safer long term investment. Gold has acted as a hedge against inflation.

Gold can be used as either a short term or a long term investment. A day ago many people made the choice to sell and quickly while the prices were up.

Researches believe that gold has grown by at least two percent in the last fifty years. The present decade has seen that growth at about 4 percent. In 2005 gold was trading at $500 per ounce and now we are seeing almost $1200 per ounce which is a staggering increase that experts did not foresee.

This increase in the price has made many people buy large amounts of gold which is why the price continues to be driven upward. However, after yesterdays decline people have been able to see how quickly buying gold at these prices might not prove wise if gold does not continue to climb and the analysts have various opinions on the future. For those who invested a decade ago in the gold market it is an ideal time to sell and make a quick bit of money. However, to rush out and invest in gold at this time period in the hopes that it will climb even higher is a gamble that is not for the faint of heart. I would certainly not suggest pulling pooling all your money in gold at this time period but its interesting to see what the glitter of this shining yellow metal can cause in people. Many men have sought it to destruction and it appears that it still holds its lustrous appeal for a few.

As it stands many analysts are still predicting that gold will rise and top over $2000 per ounce but this is all a guessing game and a gamble. For a few who want to buy at the current high prices and hope to double their money then now is the time buy but it is highly unstable right now. You should certainly not invest more then 10 percent of your money. For those who are clever you can use it as a hedging strategy still and come out on top in the long run without a substantial loss. It can work wonderfully if the stocks are bad and the dollar is poor then gold as a hedge is reasonable.

I think that yesterday was a wake up call for many who were seriously considering investing heavily in gold. It can climb and it can plummet. Some will make money but the vast majority are apt to loose if they get in on the game too late.

Sources:

http://www.taipeitimes.com/News/worldbiz/archives/2009/11/29/2003459709

http://www.moneycontrol.com/news/commodities/gold-slides-as-dollar-rallies_427821.html

http://tradingresource.com/2009/09/01/is-gold-a-good-investment-option-during-recession/