7 Reasons to Own Gold Now

1. Gold is still cheap, while shares are expensive. In January of 1980,

both the Dow Industrials and the price of gold were at the same level:
800. Now, nearly 30 years later, the Dow is above 12,000, and gold is
above $900.

2. Governments can print money to pay off their debts… But

they can't create gold. For example, the U.S. government is printing
tons of new money right now to get the banks to lend. In other words,
the supply of paper money can be infinite. But the supply of gold is
extremely limited. They say the entire gold production in the history of
the world could fit on the basketball court at Madison Square Garden.
And it's
not so easy to get it out of the ground.

3. Precious metals do well in major international conflicts. The

price of gold was fixed duringWorldWar I andWorldWar II. But silver, for
example, rose by more than 100% in both world wars. Gold has risen
for the duration of theWar on Terrorism. It all comes back to No. 2,
above... Governments ultimately print money to pay for wars.

4. Gold will rise during inflation... and during deflation. Gold

rises as the value of the dollar falls. But what many people don't
understand is that gold will do even better during deflation, as the
government lowers interest rates and wildly prints money (creating
inflation) to offset that deflation. This leads to substantially higher gold
prices… which is exactly what's happening right now.

5. Gold lowers risk in your investment portfolio. In the past, gold

has tended to do the opposite of stocks: It skyrocketed in the 1970s,
when stocks did horribly. Then in the 1980s and 1990s, when stocks
soared, gold lost more than half its value.

6.Gold supply is tightening. Timing could not be better even from a

fundamental point of view. TheWorld Gold Council latest figures show
that supply is lagging demand.What’s more, supply is likely to become
even tighter.

Mining is getting tougher. Firstly, many mines are running out and
reviving them is a costly and lengthy process. Then, governments in
countries with mines want a share of the rising prices. They are
pushing up taxes and royalties and taking back assets and giving them
to local companies.
Running mines is becoming more difficult – strikes in South America,
new strict safety rules and power shortages in South Africa. There is a
shortage of substantial new projects as a result of the reduced
exploration in the 1990s.

Other sources of gold are also lessening. Mining companies are

carrying out far fewer ‘hedging’ sales of gold – that is selling at current
rates for future delivery, which puts a ceiling on the price. Central
banks are expected to undershoot their self-imposed limits on gold
sales. As the dollar falls they know what they’d sooner hold!

7. Demand for gold is rising. Demand, on the other hand, has been
rising. Especially jewellery buying by the rising middle classes of China,
India and Turkey! This has been robust in spite of some resistance to
the new high price levels.

Jewellery these days for most of us is far from the only way to buy
gold. What you choose should be dictated by what you want from your
investment as each offers a different approach.

Conclusion

Gold should bring only benefits. This is true whether you’re squirreling
it away as a hedge against the horrors in financial markets, investing
for profit or having a speculative punt.

In theories of asset allocation gold is always there as a solid base. Gold

and gold related investments bring diversity. As gold does not move in
correlation with other asset classes it helps give a prudent balance to
your hard-earned assets.

Experienced investors incorporate gold in their portfolios. This is not

just because the world is experiencing recession and uncertainty.
Those gold fund performances show why.