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Recently many of the world's economies have gone through some big changes. As power shifts away from the US we are seeing new economic leaders just over the horizon. Traditional economic markets are faltering and our sense of value seems to constantly shift. While all this is going on, we have seen one thing remain relatively constant, and that is the price of gold.

Just look at the charts and you will see constant upward trends throughout recession. Why? gold is very immune to recession. It is a virtual stable world currency which can be traded in many forms by people from very different socio economic backgrounds.

What is gold used for?

Although we mostly think jewellry when someone mentions gold, it also has many other uses, for example, electronics and medical applications, decorative purposes such as gold plating and many other strange purposes. I have even seen a drink of brandy which had little gold flakes floating around inside the bottle.

It is the most malleable and ductile pure metal known to man and has the advantage that it does not oxidise in air or water. This makes it ideal for gold plating, jewelry and other applications where consistent visual lustre is important. It also has very good conductivity making it ideal for electronic applications where price is not such an issue. There is much more you can find out about gold if you are interested in its history and physical properties.

Will Gold Become Worthless?

Many say that gold will eventually become worthless, however many experts are in fact saying the opposite. Gold is useful in many applications by almost everyone world wide. It is also relatively rare, and hence considered a precious metal. Apparently all the gold ever mined would fit into a cube 20.2m x 20.2m x 20.2m (i.e. the volume of a standard house).

This means that although demand for this precious metal may increase, the ability to mine it will decrease, in effect increasing the price of gold. Furthermore, as investors struggle to find stable stocks to invest their life savings on, gold seems to be a stable and affordable earner. As the amount of mined gold in the world is limited, every purchase drives up the price of this precious metal. Some speculate that at one point the metal will be so overvalued, the price will drop, however we are yet to see a substantial decrease in gold price.

Lastly we should see where the demand for gold is the strongest. India is one of the largest purchasers of gold world wide and one of the emerging BRIC countries (Brazil, Russia, India and China are set to be the future world economic leaders). In Indian culture, gold is a sign of wealth, and thus holds cultural significance. Recent purchases in the Indian market have prompted a steep rise in the price of gold world wide.

As we have entered an era of economic uncertainty, there is no doubt that gold will hold its ground, and will very likely increase in value. If we take a look at the gold as an investment Wikipedia page, you can see that it mentions the price of gold in the US tripling against the US dollar since April 2001.

Should I Invest in Gold?

While many people would say yes, there are certainly other options including stocks, property and other investment options. It really depends how much you know about the field in which you are investing, how risky you want your investment to be and your general situation and ability to invest. Gold will remain one of the most stable investment options worldwide, and it doesn't really matter if you know nothing about the market, since gold has throughout history experienced predominantly steady growth. Some will suggest not throwing all your eggs in one basket, i.e. spread your investment over different forms of gold, eg. bars at the local mint, coins etc, as well as seeking different companies to handle your investments, or at least one which is reputable like the local mint.

Gold is proving itself over and over as a rugged investment option for investors, especially at times of economic instability, just look historically at the trends and it is not hard to see that it is a winner. Gold has experienced steady growth over the last decade and continues to grow somehow. Some experts say the price of gold may even double in the next few years due to the financial crisis.

If Australia starts heading towards uncertain financial future - which many predict will be the case in the first quarter 2010, then gold is an attractive investment option for some of your saving as gold is fairly immune to recession, and often shows opposite trends to the value of a countries own currency worth. Some people usually with an eye on the stock market will try and invest money in gold with the view that the investment will grow naturally over time. Of course like most things, the price of gold is always susceptible to going down in value, however as a long term investment option, and if the right time is chosen, then you will likely be onto a winner!

Gold Miner Game

 
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