Tuesday, September 14, 2010
Gold Rises to Record as Dollar Weakens
Many investors have found Gold to be the best place to invest in these uncertain times. These investors justify there investment due to the low intrest rates and the easy monetary policy which can rise inflation rates. With Gold being viewed as a commodity money and having real value compared to fiat money, it is viewed as a hedge to the threat of inflation . With Gold hitting a new record it continues to show that there is a lack of confidence in the United States economy. This rush to Gold is best summed up by Mr. Ross in the article saying "People aren't sure where to put there money" and this is why Gold rises as it viewed as a low risk place to store capital for the short and long term.
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What are people going to do with gold? Isn't the price of gold will decrease in the future since the supply will be large then?
ReplyDeleteGold is not the only investment option that offers low interest rates and a way of avoiding the threat of inflation. Even if the price of gold decreases in the future, people will look to other investment options that are becoming more popular as a result of the recession. For instance, art has proven to be a worthwhile investment following the financial crisis of 2008 because of its low interest rates. Also, investments in wine have provided the same type of security as gold and art.
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