Investing Opportunities in Gold

A few months back it was hard to believe that gold prices could go past $1000 an ounce so soon. When they did, it was a surprise. Anyway the expectation is that gold prices will continue to go up. There are many reason for that to happen.

There is strong demand for gold from countries like India and China and there does not seem to be any let up in the same. People in these countries use gold not only as a vehicle of investment but also as an instrument of beauty enhancement.

Oil prices are believed to remain above $100. Some economists have suggested that these may go to $150.

Value of US dollar has been going down and with continuing economic turmoil in the US economy USD is expected to go down even further.

Because of continuing market volatility, inflation and energy crisis, gold will increasingly be used as a hedge. On account of this factor also, the prices of gold will escalate.

Gold is also a strong vehicle of investment for a large number of retail investors and so the demand from this segment will also be on the up swing.

Along with other precious metals which are expected to gain in value, demand for gold will be more robust because of its international acceptability and short supply.

As there does not seem to be any let up in the above factors, prices for gold will continue to go up. Therefore, any investment in gold stocks will be good. One can consider investing in those gold stocks which are still undervalued and there are many like that.

However, it seems that gold prices are quite high at this time. It is expected that there will be a correction in the market. If the prices go below $900, that could provide one an entry point.

One should take precaution of never purchasing jewelery. One should always purchase bullion. Gold can now be bought through many ETFs and mutual funds. There are numerous instruments available at this stage for investment in gold and an investor has a lot of choice.

There is also a chance that US economy shows strength and dollar goes up. In that case gold prices may not go up that much. Therefore, the amount of investment in gold or for that matter in any kind of investment vehicle should be moderate.

There are companies which have many gold projects in their final stages of completion. These could provide excellent investment opportunities. Proper research is the name of the game.

Disclaimer

The above is purely an individual opinion. Investors are advised to take professional help before committing to invest.

Learn more about this author, Altaf Sahibzada.
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