Here is some good news for investors. As the gold price once again getting close to the new height it touched during the March 2008, economic analysts have begun projecting the yellow metal as the best investment venture at this juncture. They add that this is especially true for investors who have long-term savings plans. According to John Ing, a gold market analyst and the chief executive officer (CEO) of Maison Placements based in Toronto, the yellow metal is not just an investment, but it is a store of value. He further adds that gold is a financial hedge.
Echoing the views expressed by John Ing, the managing director of American Precious Metals Advisors, Jeffrey Nicholas said that though the interim viewpoint on gold continues to be 'mildly risky', the yellow metal is among the safest stakes anywhere provided one is a long-term investor and is prepared to concede his or her money for some years. Jeffery Nicholas said that he believed that the price of gold will find it difficult to break through the US $1,000 mark in the near future. He, however, pointed out that with the price of gold hovering around $1,000 every ounce, if anyone looks back two years from hence, he or she may find the price to be alluring. According to the American Precious Metals Advisors managing director, the price of gold may by far be $2,000 or even $3,000 per ounce before this generation is through.
Meanwhile, apprehensions regarding inflation are on the rise and investors are turning towards gold more and more as one of the safest investment options available to take shelter from the rise and fall of the value of the currency. This is primarily owing to the fact that the U.S. dollars are simply evaporating from the currency printing presses in order to deal with the enormous economic incentive package launched by the federal government.
The price of gold ingots went up beyond US $1,000 on October 13, 2009 touching the highest peak since March 17, 2008. It may be noted that on March 17, 2008 the price of gold touched a record high of $1,033.90 per ounce. Since then, the price of gold has been staying close to $1,000 per ounce. Usually, gold is purchased as a substitute to the U.S. dollar among the safe-haven assets preferred by the investors looking for preserve capital. Therefore, the rise in the price of gold associated with a decline in the value of the American currency.
In fact, the demand of gold has been strengthened following the recent promise made by 20 of the richest and developing nations of the world to maintain their incentive initiatives, including spending as well as low rates of interest. According to John Ing, everything does not seem to be right with the most powerful nation in the world and when such a thing happens, the dog shakes its tail. In such circumstances, it is time that people should start looking for alternatives, Ing emphasized. He further added that all investors ought to have some of their money in physical gold, irrespective of the fact they invest their money in the bullion or gold coins. According to John Ing, both gold ingots and coins may be directly purchased from the bank's bullion department.
Nevertheless, American Precious Metals Advisors managing director Jeffery Nicholas pointed out that purchasing physical gold may often turn out to be a complex affair. As an alternative, Nicholas has recommended that investors may put their cash in gold exchange-traded funds or exchange-traded funds (ETFs). These exchange-traded funds invest your money in physical gold, but trade in the same manner as equities on stock exchanges. According to Nicholas, this type of investment has gained popularity during the last two or three year and presently, the ETFs possess as much as 54 million ounces of gold. This singular aspect makes the ETFs a competitor of the main central banks as a major holder of gold.
According to Jeffery Nicholas, thanks to the gold exchange-traded funds (ETFs), now investors across the world are able to buy gold more easily and the ETFs also have an enhanced access to all such investors who may not have purchased physical gold earlier for some reason or another. In his opinion, these days purchasing physical gold has become as simple as buying another other equity. In fact, now an investor may just give a phone call to his stock broker to purchase physical gold. In addition, the investor also does not require to open a new account or have to be concerned about where he us going to take delivery of the gold, store the yellow metal and all these kind of issues.
In addition, Jeffery Nicholas pointed out that the ETFs enable the investors to sell the physical gold held by them with no trouble and promptly without having to be bothered about the large amount of commissions one is generally required to pay the brokers when they are buying or selling gold coins. Nevertheless, Nicholas also warned that this aspect of trading in physical gold may also eventually take into account extensive profit-taking by those investing in gold and this could very well prove to be a sort of problem against which gold has historically been protected. On the other hand, John Ing pointed out that if any investor is specially feeling upbeat regarding the price of gold, they ought to consider investing in gold equities and also in physical gold. Ing said that the stocks offer an investor several times more control or influence to the price of gold, especially when the price of the yellow metal is soaring. In such situations, one usually avails four-fold the leverage with gold stocks, he added.
The chief executive officer (CEO) of Maison Placements based in Toronto, John Ing is of the opinion that the gold miners in Canada, including prominent firms such as Barrick Gold Corp. (TSX:ABX) as well as Goldcorp Inc (TSX:G) usually make good endowments, as they are inclined to be specially better positioned with equity assets. He further said that the reality is that there has not been any discovery of a really great gold reserve since Bre-X was found and even that was a sham. As a result, with the passing years less and less of the yellow metal is coming to the market from the gold miners. And, at the same time, the mines are getting deeper and deeper owing to extensive extraction of the precious metal making the mining process more expensive than ever before.
Recently, the world's largest gold miner Barrick Gold Corp. (TSX:ABX) had declared that it was speculating that the price of gold would keep on going up. According to spokesperson of Barrick, the company is contemplating to raise an amount equal to US $4 billion by means of substantial share offering with a view to do away with its gold hedges. It may be mentioned here that Barrick has taken a decision to do away with its hedges owing to an ever more optimistic stance on the gold price. The gold mining company has further stated that it is of the view that the gold hedges harms the attraction of the yellow metal to the larger investment community as well as the firm's share price.