Where Does Gold Stand as an Investment?

gold investing

It wasn’t too long ago that the common rhetoric was that gold was the end all be all for a “sure thing” investment opportunity. They said that gold would never decrease in value. That it would become the new global currency. That it was more reliable than the U.S. dollar. But now, as 2015 is quickly coming to a close, we see that, unfortunately, gold is none of those things. At least at the moment.

And now, interest in gold-investing seems to be waning with the price of the precious metal lingering near $1,100 per ounce ($1,136.47 this morning to be precise), when comparatively back in late 2011, the high was almost $1,900 with talks of the possibility of reaching $2,500.

The good news

What some investors fail to see is that there is still an investment opportunity. As was just stated, gold’s price per ounce hasn’t been this low since 2010, so quite frankly, now might the best time to buy. The truth is that precious metals, like with a gold backed IRA, are useful, most definitely not a bad investment at all, but what gives them a bad reputation is pure and simple recklessness. In order to counteract a negative outcome, diversification within your portfolio is key.

Proceed with caution

If there’s anything that we have learned over the last few months, and one thing that we all should constantly be reminding ourselves of, is that there’s no such thing as a “safe” investment. When the price of an asset is relative to the perceived value of the asset, there’s going to be a lot uncertainty.

Gold fell to its production cost in 2013, but that did not prevent an even further fall. The prices of commodities can be very volatile and can fall to levels that do not make economic sense for its producers. It pays to be aware that such developments have happened in the past.

Author: Tanya