Gold: The Precious Metal

Gold has shot up in value the past couple of years, reminding me that gold has maintained its worth for centuries. Countries and currencies have come and gone, yet gold has sustained purchasing power for the past seven hundred fifty years. Gold has been around since ancient times. This precious metal is, of course, used in jewelry and gold coins and is also a component in manufacturing for some industries. Even though the rate for gold rises and falls, there is always some store of value to it.

Gold is a Coveted Metal
Imagine how many hearts have beaten faster upon hearing the shout, "Gold!" indicating that a bonanza had been found. When gold was discovered at Sutter's Mill in California in 1848, it set off a stampede, a Gold Rush from people all over the world who were seeking their fortune. The adventures of these forty-niners occurred years ago, yet this precious metal is still sought after and mined today. The U.S., South America, Canada, South Africa, Australia, Europe and other places include gold mining destinations. The finding and mining of gold is not an easy task for the most part. Independent prospectors look for gold just as they did hundreds of years ago in lonely and hard searches, sometimes in tough conditions. People still pan for gold in rivers too. Today, of course, there are major companies that find and mine gold using modern methodology and sophisticated machinery.

Novel Depicts Hardships of Mining Gold
A great novel turned 1948 movie, Treasure of the Sierra Madre, depicts individual struggles in the hunt for gold. Starring Humphrey Bogart and Walter Huston, the film is not only entertaining, but shows the hardships and dangers the old prospectors went through to find and mine gold. It also shows the unfortunate takeover of men's souls when the greed of gold possesses them.

Gone Is the Gold Standard
In days gone by, American currency was actually backed by real gold. In 1971 our country was facing huge fiscal deficits. The cost of the Viet Nam War was escalating annually, and the U.S. Treasury was printing a lot of paper money. Since our reserves were limited, President Richard Nixon took the U.S. currency off the gold standard. People could no longer exchange legal tender for actual gold, thus closing the "gold window" in the U.S.

Should You Buy Gold?
I am no Goldfinger, nor do I claim to be an expert, yet I have always had some interest in the famous yellow metal. Gold is usually used as an inflation hedge. When inflation rises, or in times of crisis, people turn to gold because it generally gains value during these periods. Gold soared to over twelve hundred dollars an ounce in December of 2009! Suddenly, gold was a hot topic and an even hotter commodity. You too can buy and sell gold, gold coins, and even gold bars, a.k.a. bullion; however, safety and storing is not always easy. If you are interested in buying or selling, be sure to use reputable dealers. If you don't want to take physical possession of the metal, there are other avenues. You can buy gold through the stock market. There are gold mining companies that are traded on the NY Stock Exchange and NASDAQ. You can purchase an exchange traded fund that tracks the price of gold. Do your own research, and use your personal financial advisors. If you have the money to be a "gold bug", then taking the gold plunge is a matter of choice. Many financial advisors suggest limiting your investment in gold and other precious metals to five percent of your portfolio. As with any investment, it's an individual decision.

Buyer Beware
Remember... all that glitters is not gold, and there are some people who will take advantage of you if they can. Pyrite or "fool's gold" has tricked many through the years. Objects can be merely gold plated and not one hundred percent gold. As with any investment, the price of gold can go up quickly or tumble down in a hurry too, so common sense should prevail.

It seems when our currency strengthens and the dollar rises in value, the price of gold goes down. If you are already a gold enthusiast and investor, you know some of the pitfalls and have had your share of success. How high gold will go in the future is anyone's guess. Some predict the price to hit fifteen hundred dollars an ounce or higher in the near future. The only thing I am sure of is that gold will be around for many years to come, and it will hold value of some kind in the future.

Sources
Coloma Valley Gold Discovery
Wikipedia