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The best time to plant a tree is twenty years ago.
The second best time is today....Chinese Proverb
This little axiom could easily to re-worded to apply to purchasing gold. But the recent pull-back in the price of gold, has led some to once again warn of a gold bubble. A bubble typically ends with consistent day after day highs, not the pull-backs as seen back in August where the $200 'fall' was soon followed by the resuming of a rise in the price of gold.
Strangely, gold seems to suffer from 'perception management' and since there is no paper currency currently convertible to gold, this presents a challenge. That being said, the warnings of 'gold bubbles' will seemingly continue all the while gold is moving forward to $10,000 - or higher as predicted by some. Another perspective to consider is that if gold were a commodity, it would be in a bubble, but it is not . . . gold has been used for money for over 3,000 years, and still is today.
The way you look at gold may have something to do with how you make your investment purchase. The Western view is that of seeing gold as a wealth gaining asset that can easily be traded. The world countries - some of them being China, India, and some of the Middle Eastern countries - view gold as currency serving the purpose of money. The fact that most of them have experienced some form of personal wealth disaster due to a currency crisis over the past decades - causes them to view gold as a trust-worthy form of currency and will cause them to most likely be the ones to drive the price higher.
Knowing these two views gives us a new way to look at gold . . . gold is not rising in value; currencies are losing value against gold. If we look at gold from this angle, we can see that gold is not heading for a bubble - and unless current money policies are changed - there are features that may drive gold to that $10,000 level.
So what are these features?
- Loss of purchasing power of currency
- Effects of 'money creation'
- Continuing trend of gold to rise in market value
The world market for gold is growing daily, and if you can invest today - even at the $1,600 market value - who's to say what it might be 20 years from now.
Read the complete article this information was taken from at this link by copying and pasting into your address bar. http://www.resourceinvestor.com/News/2011/10/Pages/Gold-Not-a-Bubble-Its-On-Its-Way-to-10000oz.aspx
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