Cochise College           Student Papers in Geology

Geology Home Page                   physical geology  historical geology  planetary  gems           

Roger Weller, geology instructor

wellerr@cochise.edu

Gold Prices
by Ileana Caban
Physical Geology
Fall 2009
            
  

Yellow Metal-Gold
 

Is gold a good investment?

 










 

 

In March 2008, the gold price increased $850 per ounce.  Since April 2001 gold has more than tripled in value against the U.S. dollar.

 

$276

Per ounce

$347

Per

ounce

$416

Per ounce

$435

Per ounce

$513 per ounce

$632

Per ounce

$833 per ounce

$850

Per ounce

$1,150

Per ounce

2001

2002

2003

2004

2005

2006

2007

2008

2009

 

Today, gold is being traded at about $1,150 per ounce and that is definitely a great increase compared to 2008 when it was $850 per ounce.  If you have gold right now then you stand to gain if you sell off at this very moment and you can nearly double your cash.  People are wondering if it is the right time to buy this yellow metal, but you never know, Gold prices could hit rock bottom and you may end up a loser.  But it is surely the right time to sell off determining the marketís potential right now.

 

There is a huge demand for gold worldwide.  Gold as an investment option is being considered by most stock experts and analysts.  The recession has seen a slump in the stock markets, companies are under financial crises, banks have declared bankruptcy, so the investor is quite scared of his hard earned savings and is considering gold as a safe and sound investment.  Gold acts as a good hedge against inflation; it can give you instant cash and even if the economy is bad you will still have reason to smile, as you will have gold which will not lose value quite fast.

    

     When people invest, they either have a long term goal playing on in their mind or a short term period where they will get sufficient returns.   You can use gold as a short term goal or a long term investment.  Research and analysis suggests that gold has grown by at least 2% in the last 50 years and the present decade has seen the gold market grow at 4% annually.  The gold market has seen fluctuations and in the year 2007 itself it was sold at roughly $833 per http://skywalker.cochise.edu/wellerr/mineral/gold/6gold-yubariver-picknlick3131.jpgounce. 

    

This precious yellow metal has never shone so bright.  But it is certainly not a short term option, because gold has seen to fluctuate quite a bit and you may burn your hands in this process.  Gold prices may climb up but that is not sure because the market is quite volatile.   It is better to stay away from gold in this recession time. It has been recommended that investors should invest 5% to 20% in gold as a part of a well diversified portfolio. The percentage you choose depends on how much risk you able to take.
 

So, is gold a good investment?

In my opinion, yes and if you do, make it for the long term.

 

 

 

 

Work Cited

www.wsj.com

www.goldline.com

www.wallstreetjournal.com

www.barrons.com

www.marketwatch.com

www.fpajournal.org