Is it the gold bubble now..
By vanny
@vandana7 (102698)
India
May 5, 2011 2:32am CST
Ok - traditionally gold has been favored as an investment against inflation. Inflation is inevitable, thanks to growing population leading to more demand when compared to supply. This is simple logics. To top it all, we have depleting land resources thanks to salt water eating away coastal fertile lands.
But I thought it is food that is getting expensive. Right?
So - how does investing in gold help me?
I know I sound dumb. But look at it like this. Most people would need to buy food, right. So they are hardly likely to have enough monies to buy gold. Obviously gold will slip! And if I do need that money, I might well have to sell to a richer person who will be in a position to dictate terms. Eeeek!
So why is gold increasing in price right now? One reason could be the Exchange Traded Funds. Yes, banks have lots of monies with them, and they are not willing to lend. Instead, they are in gold buying spree, which they offer to gullible investors like me as Exchange Traded Fund. Even silver has the same fate.
In the long run, it is not making sense, though in the short term, I do see it as a very lucrative investment. What if all banks end up parking all their monies in gold, and suddenly there is acute liquidity crisis?
Any financially wise ones out there? Please make me wise too. :)
3 people like this
4 responses
@jennyze (7027)
• Indonesia
6 May 11
I love gold. Our ancestors believes in gold. Always told generation after generation to invest in gold, as I did the same. Of course investing all our money in gold would be risky when we know we also need cash to buy things in emergency. I would say that I would invest half of the in gold and let the others be cash or invest on farms or rice fields.
@vandana7 (102698)
• India
6 May 11
What about house? Out here, we have bad administration system. If I am not a farmer, which I am not, I cant manage farms and rice fields. So I will have to depend upon somebody, right? They will cooly pocket a decent sum, and pass on pittance. :) Of course, they will blame climate, salt water, and you name it..
Physical gold scares me. Who will come to catch my throat kinda.. :)
@vandana7 (102698)
• India
7 May 11
Jenn..you are so right. :) Just that I feel I look terrible with all that gold on me. You know old hags who look overdecked with gold. Moreover, when I wear anything on my ears, I get itch. :) Somehow, I look better if I am simple. :) Investing means only through ETFs, that doesnt make me feel safe Jenn. More so because banks are more likely to sink because of some senior professional playing mischief. We've seen scams like Enron. :) A bit scared.
@jennyze (7027)
• Indonesia
6 May 11
In Indonesia we can have a far or rice field and employee people to do the works, we are still in control of the management.
Somehow I don;t really like investing on house, I don't like to stay in one place, I like to be able to move and stay somewhere else without the stress of selling this house and buying another. I guess I am an apartment style person.
I know there is now a gold rush just like the 1950s. Still, gold will always a good long term investment, as long as you don't invest all on it.
@topffer (42155)
• France
5 May 11
Hello vandana,
I see no lucrative investment in gold : you buy something when it is cheap, not when it is overpriced. Maybe it will increase in the future, maybe not : gold is used as a safe investment during an economic crisis, and will be perhaps sold after the crisis, so,if you buy today you may lose your money. One reason of its price was its use in electronic boards, like for copper. But there is less gold in electronics today, and maybe no more tomorrow. Betting on inflation is also betting on an economic recovery, but the worst scenario during an economic crisis is deflation, and in this case, you will just have to hoard your money to earn more
.
.@vandana7 (102698)
• India
5 May 11
Topffer, why is it that both of us are thinking alike on this? I too feel it is overpriced, and while its price is bound to increase further, the gain will only be for a short period, may be an year or two. There is something about overpriced goods. People start turning to other alternatives when it reaches beyond them.
That is what is going to happen to gold I feel. It will get down by at least 25 percent of price at which it is available as of now. But am I wrong in thinking like that? Are there other analysts also who do think like that?
1 person likes this
@topffer (42155)
• France
5 May 11
Except in 1980, the price of gold has never been so high. Michael Lewis, the gold guru at Deutsche Bank says that it is extreme but has still some margin and can continue to raise. Personally I will not put a penny in physical gold today. I think it is a good moment to sell it, but not to buy it.
@vandana7 (102698)
• India
5 May 11
But as astonysh pointed out, there is no reliable currency. And with inflation as high across the world, it is a bit scary, dont you think? May be it makes sense, otherwise so many bankers would not be sucked into it. Not that they've not made mistakes in the past.
We've akshaya thritiya (a festival) tomorrow. People here buy gold on this day. It is supposed to be auspicious. My father has been asking me to buy some. I have been skeptical so far. May be I will buy a small chain. Only thing is, it is not making sense. :) Gold is usually costlier on that day. lol
1 person likes this
@thesids (22180)
• Bhubaneswar, India
5 May 11
Gold Investments! Nah... not me defintely. I will prefer to invest in books even if I will never read them but not in gold even though I will not wear it. Too risky for me.
Sorry, I studies economics only till 1994 and have not much rememberance of it so cannot participate on that one aspect.
@Professor2010 (20156)
• India
5 May 11
Vandanaji
Just now i had been to the Jewelry market here, the shops are giving special offers in gold cost, silver cost, gemstones etc, it is due to Akshya Trutia tomorrow 6th May 2011.
I bought a 10gm gold coin.
About the cosr, in 1968 the price was around 350 per tola, 11.666 grm of pure gold, that was my salary of one month as lecturer
One should buy gold if he has money, as kind of saving, may not be investment.
Thanks for sharing
Cheers.
God bless you, have a nice day ahead.
Professor ‘Bhuwan’. .
@Professor2010 (20156)
• India
5 May 11
Now at 9pm, price is 22, 500 per 10 gm of pure gold, 
when i purchased this morning it was 400 highter, but still less by 500 rupees of yesterdays price, so right now about 1000 rupees less
the price may go up tomorrow, too many marriage ceremony
for chain making charge is extra depending upon design
buy one of 22k purity, not 24k
Bhuwan
when i purchased this morning it was 400 highter, but still less by 500 rupees of yesterdays price, so right now about 1000 rupees less
the price may go up tomorrow, too many marriage ceremony
for chain making charge is extra depending upon design
buy one of 22k purity, not 24k
Bhuwan