After a huge rise in value in 2010, the price of gold has dropped 6 % a month into the New Year (CNN Money). People around the world have been looking for different ways to invest and save their money while the global market has been at unease.
(Courtesy of CNN Money)
Gold is one of the safest believed commodities that can always be exchanged at solid rate. By the end of 2010, gold had been valued at $1,421.40 per once, over 300 dollars more than the price a year earlier. But as the global markets appear to be improving (not fixed, as clearly stated in the article), investors’ faith is starting to rise and more people are beginning to invest in bonds and stocks once again.
Holding gold can benefit the individual in times of savings, giving them a sense of security when a certain currency is at unease; however, when more and more people begin investing in gold rather than in stocks and bonds; this could limit economic growth within a country. This idea limited investing can be seen as a whole over the past few years during the recession.
Is it good that gold is losing value for the global economy? Should more people invest in stocks and bonds or test their luck with the price of gold?
References: CNN Money. “Why Gold is Losing its Luster”. http://money.cnn.com/2011/01/27/markets/gold_price_decline/
(Post by Evan Amano)
I think if you want to have a safe investment that will not lose value in the long run, invest in gold. But if you want to make a lot of money, risk taking is the only way to do that. Taking risks on the stock market does not often pan out, but when it does, the rewards can be enormous. So when deciding whether to invest in gold or not I think it depends on what type of investing one is looking to do. Gold obviously recently skyrocketed in price and it would have been a good idea to invest big in gold a few years ago, but historically, I believe, gold has been fairly in-volatile.
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