This page is quite old hence its rather spartan appearance.
Why not check out our Latest Stories page for our newest articles or search our site for anything.
COMMENT
By
It has often been said that gold is only worth what someone is prepared to pay for it (the same can be said for any asset to be fair). On Wednesday, gold fell $15 an ounce, or 3%, to $437 because fewer investors want to hold the metal right now. The reasons why gold has fallen from a near 16-year high are manifold. Some pundits have suggested that a revival in the dollar from its weakest level in almost five years may be the cause. This is because gold is seen as a hedge against the US currency. Others have suggested that tumbling oil prices could imply inflation may now be less of a problem than expected. This is because gold is not only seen as a hedge against the dollar, but as a financial bet against inflation too. Or it could simply be that some speculators are liquidating their positions to book in year-end profits. The truth about gold is that there is no accurate way to put a value on the metal. Some have long argued that the yellow metal should be worth no more than $20 an ounce, though that seems a little mean! After all gold does has many uses particularly in jewellery and decorations, and also in some medicines. Meanwhile, some investors like to hold gold as an asset diversifier because the metal is said to be negatively correlated to the stock market. In other words, the price of gold tends to, but not always, move in the opposite direction to shares. Consequently, a portfolio that comprises both shares and gold is seen to be less risky than one that contains only shares. A portfolio that includes gold may appeal to those investors who might like the idea of introducing stability into their investments. Some may even point to its remarkable performance in the 1970s when the price of gold surged almost seven-fold to over $600 an ounce. However, its performance in the past 24 years has been considerably more lacklustre, showing almost a 30% loss in dollar terms, and there are not many investments I can think of that have done that badly over such a long period. More on Gold: A Cheap Way To Invest In Gold | A Real Golden Opportunity | Stock Market Goldmines