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MARKET COMMENT
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How much is gold really worth? The simple answer is whatever someone is prepared to pay for the stuff. Some argue that gold should be worth no more than $20 an ounce. They say that gold only has limited usages - it is, after all, inert. This contrasts with other precious and semi-precious metals, such as silver and platinum, where industrial demand governs prices. That said, gold is trading at prices way in excess of $20 an ounce. In fact gold has recently climbed above $365 an ounce again. Some even believe that it could re-test the $380 an ounce level that was nearly reached earlier this year. However, whether gold will continue to climb is really anyone's guess. That is because gold prices are driven primarily by sentiment, and that, in my opinion, could be a jolly good reason to steer clear of the yellow metal. Let's face it, there are no accurate means of putting a value on the metal. So investors who buy at today's price are simply relying on somebody else silly enough to take it off their hands, hopefully at a higher price. However, the fact that gold prices continue to climb would suggest that demand, whether driven by sentiment or some other emotion, is genuine. That could explain the recent decision by the World Gold Council to seek a listing for its investment fund, Gold Bullion, on the London Stock Exchange. Through this fund, which could be available by next month, investors have an opportunity to buy bullion bars cheaply and painlessly. Each Gold Bullion share will represent one-tenth of an ounce of gold, which equates to £22 a share at today's gold price. Investors will not have to pay storage charges and the only costs should be the usual stamp duty and commission charges associated with other types of share dealings. The gold itself will be stored in the vaults of HSBC (LSE: HSBA)(NYSE: HBC) in London. It can be argued that gold can be a useful asset diversifier. This is because gold is said to be negatively correlated to the stock market. In other words, the price of gold tends to, though not always, move in the opposite direction to the stock market. This could appeal to those investors who might like the idea of introducing stability into their portfolios. However, there is a price to pay for that stability, namely lower returns on your overall investment, which some investors may find acceptable. More: Stock Market Goldmine | Don't Be Duped By Gold | Selling Fool's Gold