Current Gold Prices

Current Gold Prices

Current Gold Prices By 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 send 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. One believes that war is imminent
and therefore buys gold to hoard. When the US dollar weakens and interest rates are low
gold is popular. When inflation is rampant like in the 1970s gold goes up in price and
everyone buys. 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. If you purchased gold in 2000 and held until early 2011 you
could have sold for a profit of $1,600 an ounce. 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. It is best to beware and to pick and choose carefully when deciding to buy or sell
at current gold prices. For more insights and useful information about
investments and investing, visit

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