Gold 101

Gold has a 3,000 year history as a monetary asset and is a widely accepted medium of exchange. Gold is a Preservation of Wealth and a safe haven during economic instability and times of inflation. As Alan Greenspan said in 1999: “Gold is the ultimate form of payment.”

World gold demand estimation is difficult to predict. Physical gold exchange is frequently estimated by many different groups. But in reality, it is an opaque market since the annual gold consumption not known. The production can be estimated. In general it is a very active market. Countries buy and sell, and then may or may not announce these actions.

The Gold market is currently in a bullish stage! This is due to several factors which include:

Economic or social uncertainty such as we are in right now. We are currently in a big recession due to the credit crunch with a new untried socialist president in the White House. The North Koreans have developed Nukes and delivery systems. The Iranians, when they aren’t fighting in the streets, are working on their own nukes and delivery systems. The high price of oil has empowered Russia and many Middle Eastern countries that are now able to export “unrest” to their neighbors. The world has become a scary place.

Inflation otherwise known as monetary debasement is occurring right now. Until 30 years ago, the dictionary definition of inflation was an increase in the amount of money outstanding money stock) followed by rising prices. We have no idea what is happening to the stock of outstanding money since it is hidden by the Federal Reserve. The USA is spending Trillions on getting the economy going after the credit crunch. Where is all this money coming from? The printing press of course. We have inflation just starting to kick in due to a continued increase of money and all these stimulus packages.

Commodity prices in general, excepting the price of Oil and Gold, have collapsed. We are in a Gold bull market and all of its drivers appear intact.

Investing in Gold stocks is an investment option for anyone who is looking to invest in the precious metals market but does not want to take physical delivery of gold. Gold stock investing is an investment into the company, not the actual physical gold. Investing in Gold Stocks provide leverage, since as the gold price goes up, the stock of the gold company should increase by a larger percentage, unfortunately this goes both ways. At the moment, we are in a bull market for gold.

Just like any other stocks, gold stocks in your portfolio should be diversified since the gold stock market is volatile just like all other sectors, and if you invest in gold stock from just one company and the market takes a downturn, you may see substantial losses. This site will profile several different gold stocks that will provide a “White Gold District portfolio” on the right to help an investor choose exposure to the White Gold District.

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