7 Reasons to Own Gold Now1. 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 isabove $900.
2. Governments can print money to pay off their debts…
Butthey can't create gold. For example, the U.S. government is printingtons 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 isextremely 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'snot so easy to get it out of the ground.
3. Precious metals do well in major international conflicts.
Theprice of gold was fixed duringWorldWar I andWorldWar II. But silver, forexample, rose by more than 100% in both world wars. Gold has risenfor 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.
Goldrises as the value of the dollar falls. But what many people don'tunderstand is that gold will do even better during deflation, as thegovernment lowers interest rates and wildly prints money (creatinginflation) to offset that deflation. This leads to substantially higher goldprices… which is exactly what's happening right now.
5. Gold lowers risk in your investment portfolio.
In the past, goldhas tended to do the opposite of stocks: It skyrocketed in the 1970s,when stocks did horribly. Then in the 1980s and 1990s, when stockssoared, gold lost more than half its value.
6.Gold supply is tightening.
Timing could not be better even from afundamental point of view. TheWorld Gold Council latest figures showthat supply is lagging demand.What’s more, supply is likely to becomeeven tighter.Mining is getting tougher. Firstly, many mines are running out andreviving them is a costly and lengthy process. Then, governments incountries with mines want a share of the rising prices. They arepushing up taxes and royalties and taking back assets and giving themto local companies.