In this environment, investors may be turning to gold. Traditionally, gold is considered a hedge against inflation, since its value tends to rise in an unequal economy. If you're wondering about the Gold Price Per Ounce and if now is the right time to buy gold or if you're considering investing in the future, act now. CNBC's Jim Cramer told investors Wednesday that gold is about to rebound, making now an optimal time for investors to take the plunge. The point here is that gold isn't always a good investment.
The best time to invest in almost any asset is when there is negative sentiment and the asset is cheap, providing substantial upward potential when it returns to favor, as stated above. At the other end of the spectrum are those who claim that gold is an asset with several intrinsic qualities that make it unique and necessary for investors to keep it in their portfolios. And, since inflation has soared to 40-year highs, gold is also being promoted as a hedge to stay ahead of rising prices. The history of gold in society began long before even the ancient Egyptians, who began to make jewelry and religious artifacts.
The government is the owner of all gold coins in circulation and ends the minting of any new gold coin. This means that investing in individual gold companies entails risks similar to those of investing in any other stock. Investors can invest in gold through exchange-traded funds (ETFs), buy shares of gold miners and associated companies, and purchase a physical product. Collector coins, such as South African Krugerrands, Canadian maple leaves and American golden eagles, are the most widely available type of gold coins.
Gold mutual funds, such as the Franklin Templeton Gold and Precious Metals Fund, are actively managed by professional investors. During the 1900s, there were several key events that eventually led to the exit of gold from the monetary system. The most common gold coins weigh one or two ounces, although half-ounce and quarter-ounce coins are also available. The SPDR Gold Shares (GLD) ETF, for example, contains physical gold and deposit receipts, and its price follows the price of physical bullion.
Today, these organizations are responsible for retaining nearly one-fifth of the world's supply of gold above ground. Just remember that, like gold stocks, you don't buy gold, only paper that is theoretically backed by the debt or equity of mining companies or physical ingot futures and options contracts. Gold, with its reputation as a hedge against inflation, is only a means of stoking investor fear, as well as a belief in the promise of excessive profits. Gold is considered a safe investment and often attracts investors during periods of economic and geopolitical crisis.
Finally, if your primary interest is to use leverage to benefit from rising gold prices, the futures market may be your answer, but keep in mind that any holding based on leverage involves significant risk.
