http://www.profitableinvestingtips.com/profitable-investing-tips/current-gold-prices
Current Gold Prices
If you are one of the folks who habitually buy gold bullion as a hedge against inflation, current gold prices are a little disconcerting. Investing in gold was all the rage in the first years of the century as gold rose from $300 an ounce to $1,900 an ounce. After peaking in 2011, gold has lost a third of its value against the US dollar and trades for just over $1,200 an ounce in January of 2014. At current gold prices anyone who bought gold bullion in 2000 at $300 an ounce still can sell at a handsome profit. Should one sell at current gold prices? Let us look at history.
When Gold Was the Standard and then Not
A gold standard is a monetary system in which the standard economic unit of account is based on a fixed quantity of gold. In essence, when a country had the gold standard as its monetary system it promised to redeem currency with gold coins. In the USA a twenty dollar gold piece contained an ounce of gold. Thus gold was pegged at $20 an ounce. When the Great Depression hit, President Roosevelt decreed that all gold coins be turned in at the standard rate and exchanged for non-gold currency. Americans were forbidden from owning gold. This was the case for forty years. Then, as inflation took its toll President Nixon took the USA off the gold standard in 1971 when the standard was $30 an ounce. President Ford signed a law allowing Americans to own gold bullion and coins in 1974 as gold climbed against the dollar to nearly $860 an ounce by January of 1980. It subsequently crashed and settled in the $300 range from where it eventually fell to around $200 an ounce until the beginning of this century. When considering current gold prices remember the history of gold prices over the last forty years. This is the start of sound fundamental analysis of gold as an investment.
Comparisons to Buying and Holding Gold
Gold is great when it is going up and not so great when it is going down. Gold does not sent you a quarterly check like dividend stocks. The sole rationale for buying and holding gold is that one does not trust the economy or the government to maintain a stable economy.
2. If you are one of the folks who habitually
buy gold bullion as a hedge against
inflation, current gold prices are a little
disconcerting.
HTTP://WWW.PROFITABLEINVESTINGTIPS.COM/P
ROFITABLE-INVESTING-TIPS/CURRENT-GOLDPRICES
3. . Investing in gold was all the rage in the
first years of the century as gold rose from
$300 an ounce to $1,900 an ounce.
HTTP://WWW.PROFITABLEINVESTINGTIPS.COM/P
ROFITABLE-INVESTING-TIPS/CURRENT-GOLDPRICES
4. After peaking in 2011, gold has lost a third
of its value against the US dollar and
trades for just over $1,200 an ounce in
January of 2014.
HTTP://WWW.PROFITABLEINVESTINGTIPS.COM/P
ROFITABLE-INVESTING-TIPS/CURRENT-GOLDPRICES
5. At current gold prices anyone who bought
gold bullion in 2000 at $300 an ounce still
can sell at a handsome profit.
HTTP://WWW.PROFITABLEINVESTINGTIPS.COM/P
ROFITABLE-INVESTING-TIPS/CURRENT-GOLDPRICES
6. Should one sell at current gold prices? Let
us look at history.
HTTP://WWW.PROFITABLEINVESTINGTIPS.COM/P
ROFITABLE-INVESTING-TIPS/CURRENT-GOLDPRICES
7. When Gold Was the
Standard and then
Not
HTTP://WWW.PROFITABLEINVESTINGTIPS.COM/P
ROFITABLE-INVESTING-TIPS/CURRENT-GOLDPRICES
8. A gold standard is a monetary system in
which the standard economic unit of
account is based on a fixed quantity of
gold.
HTTP://WWW.PROFITABLEINVESTINGTIPS.COM/P
ROFITABLE-INVESTING-TIPS/CURRENT-GOLDPRICES
9. In essence, when a country had the gold
standard as its monetary system it
promised to redeem currency with gold
coins.
HTTP://WWW.PROFITABLEINVESTINGTIPS.COM/P
ROFITABLE-INVESTING-TIPS/CURRENT-GOLDPRICES
10. In the USA a twenty dollar gold piece
contained an ounce of gold.
HTTP://WWW.PROFITABLEINVESTINGTIPS.COM/P
ROFITABLE-INVESTING-TIPS/CURRENT-GOLDPRICES
11. Thus gold was pegged at $20 an ounce.
When the Great Depression hit, President
Roosevelt decreed that all gold coins be
turned in at the standard rate and
exchanged for non-gold currency.
HTTP://WWW.PROFITABLEINVESTINGTIPS.COM/P
ROFITABLE-INVESTING-TIPS/CURRENT-GOLDPRICES
12. Americans were forbidden from owning
gold. This was the case for forty years.
HTTP://WWW.PROFITABLEINVESTINGTIPS.COM/P
ROFITABLE-INVESTING-TIPS/CURRENT-GOLDPRICES
13. Then, as inflation took its toll President
Nixon took the USA off the gold standard
in 1971 when the standard was $30 an
ounce.
HTTP://WWW.PROFITABLEINVESTINGTIPS.COM/P
ROFITABLE-INVESTING-TIPS/CURRENT-GOLDPRICES
14. President Ford signed a law allowing
Americans to own gold bullion and coins in
1974 as gold climbed against the dollar to
nearly $860 an ounce by January of 1980.
HTTP://WWW.PROFITABLEINVESTINGTIPS.COM/P
ROFITABLE-INVESTING-TIPS/CURRENT-GOLDPRICES
15. It subsequently crashed and settled in the
$300 range from where it eventually fell to
around $200 an ounce until the beginning
of this century.
HTTP://WWW.PROFITABLEINVESTINGTIPS.COM/P
ROFITABLE-INVESTING-TIPS/CURRENT-GOLDPRICES
16. When considering current gold prices
remember the history of gold prices over
the last forty years.
HTTP://WWW.PROFITABLEINVESTINGTIPS.COM/P
ROFITABLE-INVESTING-TIPS/CURRENT-GOLDPRICES
17. This is the start of sound fundamental
analysis of gold as an investment.
HTTP://WWW.PROFITABLEINVESTINGTIPS.COM/P
ROFITABLE-INVESTING-TIPS/CURRENT-GOLDPRICES
18. Comparisons to
Buying and Holding
Gold
HTTP://WWW.PROFITABLEINVESTINGTIPS.COM/P
ROFITABLE-INVESTING-TIPS/CURRENT-GOLDPRICES
19. Gold is great when it is going up and not
so great when it is going down.
HTTP://WWW.PROFITABLEINVESTINGTIPS.COM/P
ROFITABLE-INVESTING-TIPS/CURRENT-GOLDPRICES
20. Gold does not sent you a quarterly check
like dividend stocks.
HTTP://WWW.PROFITABLEINVESTINGTIPS.COM/P
ROFITABLE-INVESTING-TIPS/CURRENT-GOLDPRICES
21. The sole rationale for buying and holding
gold is that one does not trust the
economy or the government to maintain a
stable economy.
HTTP://WWW.PROFITABLEINVESTINGTIPS.COM/P
ROFITABLE-INVESTING-TIPS/CURRENT-GOLDPRICES
22. One believes that war is imminent and
therefore buys gold to hoard.
HTTP://WWW.PROFITABLEINVESTINGTIPS.COM/P
ROFITABLE-INVESTING-TIPS/CURRENT-GOLDPRICES
23. When the US dollar weakens and interest
rates are low gold is popular.
HTTP://WWW.PROFITABLEINVESTINGTIPS.COM/P
ROFITABLE-INVESTING-TIPS/CURRENT-GOLDPRICES
24. When inflation is rampant like in the 1970s
gold goes up in price and everyone buys.
HTTP://WWW.PROFITABLEINVESTINGTIPS.COM/P
ROFITABLE-INVESTING-TIPS/CURRENT-GOLDPRICES
25. When the economy stabilizes gold goes
down and stays there for a decade or two, or
longer. If you purchased gold in 1980 and
held it for twenty years you would have
received no dividends on your investment
and the value of your investment would have
fallen by half in the first year.
HTTP://WWW.PROFITABLEINVESTINGTIPS.COM/P
ROFITABLE-INVESTING-TIPS/CURRENT-GOLDPRICES
26. If you purchased gold in 2000 and held
until early 2011 you could have sold for a
profit of $1,600 an ounce.
HTTP://WWW.PROFITABLEINVESTINGTIPS.COM/P
ROFITABLE-INVESTING-TIPS/CURRENT-GOLDPRICES
27. And if you bought instead of sold at the
high point in 2011 you would have lost
nearly $700 an ounce by today at current
gold prices.
HTTP://WWW.PROFITABLEINVESTINGTIPS.COM/P
ROFITABLE-INVESTING-TIPS/CURRENT-GOLDPRICES
28. It is best to beware and to pick and choose
carefully when deciding to buy or sell at
current gold prices.
HTTP://WWW.PROFITABLEINVESTINGTIPS.COM/P
ROFITABLE-INVESTING-TIPS/CURRENT-GOLDPRICES
