Investment Idea

Investment Opportunity - Gold

The past two days have cumulated in the price of gold dropping below $800 per ounce after setting the all time high closing price less than a week ago. Many investors have very wisely cashed in some profits after gold’s big run from $670 an ounce in late August. This may be opportunity for buying on the way down as the downward pressure may continue in the near future. In the long term, however, gold should march higher on its quest towards $1000 dollars an ounce which should be attainable if the weakness of the US dollar continues. Of course really long term $1000 is the tip of the iceberg to me. If you missed out on the last big run in gold the past two months now may be the time to begin the buying process to get on board for the next run.

Dollar Weakness

The dollar index has been at an all time low; recently hitting the lowest point ever recorded since they started tracking the dollar index in 1973! This is alarming to say the least. The dollar index has recovered in the past few weeks from this all time low, but, will remain under pressure as the fed eyes another rate cut that would weaken the dollar even more. The fed appears that they are going to “sacrifice” the dollar in a last ditch effort to save the mortgage industry and in turn the housing market. A natural “safe haven” for currency weakness is gold. For more on this check out a book I have read and recommend you read Gold The once and Future Money.

Buying Gold

There are many different ways to get involved with the “gold rush” and here are the most popular. There are gold ETF’s symbols: GLD (one share represents 1/10th of an ounce of gold) and IAU. Gold mining company stocks whose profits increase with a higher spot price symbols: NEM, PDG, ABX, and AU just to name a few. You can also buy the real thing in the form of bullion coins or even bars from bullion dealers or most coin shops. As with any type of investment diversification is the best way to go.









Real World Money Management’s editorial goal is to provide a forum for personal finance and investment ideas. My blogs and other features should not be construed as investment advice. An investor's best course of action must be based on individual circumstances.