Is This A Good Time To Buy Gold?

From the beginning of the current crisis (i.e. since 2007) more and more people have turned their attention to gold as an investment. That is due to the crash of any other forms of investment and mostly of the real estate market. But buying gold is not an easy decision to make at present and the question arises: whether this is a golden opportunity to take such action.

Since gold is the most popular of all precious metals, gold investments are generally viewed as a hedge against any mishap or act of God such as war, falling currency, and crises of any kind. In fact, gold shares certain features with money and has been used as such throughout history.

Gold itself comes at a price which is set by the London gold fixing or gold fix. In addition to determining the price of gold twice a day, this procedure has an informal outcome. It creates a recognized rate that operates as a benchmark in pricing gold products and derivatives. It is practically a telephone meeting that takes place each business day at 10.30am and 3pm, London time, among the representatives of five bullion-trading companies of the London bullion market.

Given that new trading records have recently been set for gold futures contracts, one could say that we witness a new gold rush. On the face of it, this impression is emphasized by the fact that over the last decades gold investment had a low return as compared to stocks for example. However, people now tend to put more of their savings in gold only because of investment diversification. In other words, people have become cautious and avoid keeping all their eggs in one basket. They choose to invest in a variety of assets in order to reduce risk and maintain their overall return. The gains thus seem to be two-fold: safety and profit at the same time.

As shown above, it seems that gold is now in demand and gold prices are up. Despite this fact, gold proponents argue in favor of gold acquisitions on account of an indicator called the Real Interest Rate which can better render the larger picture of gold investment. Considering the pros and cons of buying gold, it may be however wise to know that it is best to become a gold owner when you need it. And if you need it now there are plenty of arguments to back your choice.

Source by Jack Wogan

Is This A Good Time To Buy Gold?