Now, we sometimes see such movement in a single day. As of September 2005, we’ve seen gold on an incredible rise. It has gone from $450 an ounce to $1,800 an ounce in 2011 and now at around $1,650.

Most mainstream investors didn’t think much of the change in the first decade, but by 2005, gold was at an all-time high. So when it crossed the $1,000 mark in 2009, investors started taking note.

Gold, once only watched by central banks and gold miners, was now mainstream. In fact, gold can be bigger than many tech stocks. Many people are looking into gold IRAs for investments…here is a list of the best gold IRA companies if you are interested.

What’s Up with Silver?

Siver has also had a good run, and the price is up and may even have a long upward run than gold in the next few months and years.

How’s The Market for Each

Silver had a huge run in the early part of the century and went up from about $7 per troy ounce to about $35. When you look at the percentage, it is on an even bigger upward trend than gold.

Consider The Demand

Silver has many industrial and commercial uses. Traditionally, we used it in the film industry. Still, it continues to be used in technology and cell phone manufacturing, musical instrument making, jewelry, medical instruments, and many other areas.

Silver is used in electrical appliances and electronics because it has low resistivity and is used to convert solar power into electrical power. Thus there is a growing need for it in the solar energy process. It is also used for its antibacterial properties and as a means for water purification and food hygiene.

Uses for Gold

Gold does not have as many industrial uses. Of course, jewelry accounts for about two-thirds of the gold demand. It is also used in medical applications, but that is about it. So the question arises, at what point will the demand start to go down, simply because it is too expensive. After all, there comes a time when even luxury items become too expensive.

Financial Stress

Most investors see gold as an investment. They see gold as stability and a good purchasing option in an overly unstable climate. Gold has risen in value over the last decade, and the U.S. dollar keeps going down. This is because the U.S. government has had to inject so much money into the declining economy. And because countries like China hold trillions of U.S. bonds and too much money invested in dollars. So many investors swap their dollar investments for gold.

Gold is a preferred vehicle and is thought to be a protection against risk. However, precious metals like platinum, palladium, and silver are also on the rise because of the stress caused by the world’s financial issues. Gold may still appeal to investors as a haven to store capital. Still, silver is also becoming easier and more people are taking advantage of adding it to their investment portfolios.

The Ratio

Investors use a variety of different methods to estimate the trends. They use the price to earnings ratio to help them get a view of the estimated growth and the value of the metal compared to something else.

Many years ago, a gold dealer named Franklin Sanders was determined to work out the average gold price compared to silver. He took his research as far back as 1792 and found that gold was about 16 times more than silver. In the last 100 years, that ratio has been as high as 96, but today the gold-silver ratio is about 51.

Traders believe the financial ratio has a historical pattern, and at today’s gold price, the price of silver needs to rise to about $58 per ounce, almost double what it is not to return to the normal 27% ratio.
Investment Options

In the old days, to own silver or gold, you had to purchase it physically, and you can still do that. Silver bars weigh about 6.8 pounds, and you can store them in a safe. However, in physical shape, coins are the most common investment vehicle.

Exchange-Traded Funds

The ETF’s started in the 21st century and track prices of commodities like natural gas, crude oil, gold, and silver, among other things. If you have a stock brokerage account where you trade stocks, you can trade for silver in iShares Silver Trust or the ETFs Silver Trust, listed under SIVR. Buying and selling silver and gold gives you the option of buying when low and selling when high without actually holding the metal itself.

Another option is to purchase shares of a company that mines silver or gold. You can buy shares in companies like Silver Wheaton (SLW), and these companies rise as the price of metals rise.

Final Word

Gold and silver can be great investments, but they are also very volatile, so it is not an investment for people who don’t like risk. You can’t trade these products today, and there are large price swings that can be quite scary.

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1. Holding value

Since the ancient days, gold preserves wealth. Gold is also a form of wealth used to pass on an inheritance. Due to its unique features, non-corrosive and melting quickly, gold has gained popularity as the only metal that has survived against the economic tests and upheld its value over a long time. Unlike notes and coins, gold has stood unshaken by the financial crisis that has hit the world economy severally.

2. Prices of Gold

The U.S. dollar has been one of the reserve currencies in the world for ages. Nevertheless, the dollar has risen and fallen in the past, and maybe right that history may repeat itself. Between 2008 and 2012, when the U.S. dollar weakened against other currencies, many people went to buy gold, which led to a rise in gold prices due to its demand. The fluctuations in the value of the U.S. dollar lead people to use gold as a reserve metal. It is an assured investment that you can never sell at a loss.

3. Inflation and deflation Hedge

Inflation has the potential to bring down any strong economy following a rise in the costs of living. Gold does not suffer the effect of inflation; instead, when inflation begins to wear down economies, people invest and begin to buy gold to preserve their wealth. Gold is a stable store of wealth, especially in cases where inflation is predictable. In the event of a price drop of commodities and the purchasing power goes up, gold prices are not affected. The trade of gold remains stable enough and preserves its value.

4. Scarcity

Gold production has been on the decrease since 2000. Gold mining takes a lot of time to begin the mining process and successfully produce gold for the market. In 2019 gold production reduced by one percent, and this decrease may go on in the coming years. When production decreases, the demand unsettled. Unsatisfied demand results in a price increase of the gold circulating in the market, which increases returns.

5. Demand

Gold will always be on-demand, and mostly, the need is continually rising. An increase in demand for commodities amongst different investors results in an increased demand for gold. Consumer habits like jewelry demand result in increased demand for gold. For example, every year in October, when India has many weddings going on, there is a rise in gold consumption, boosting gold prices. Other investors who buy gold for saving purposes may contribute to the high demand for the gold. For example, in China, gold bars are a form of savings and more savings results in high demand for gold bars.

6. Correlation to other financial investments

Investors have used gold to complement their investment in stocks and bonds because they negatively correlate. The nature of their relations results in a reduced risk of investment. Practically, when the stock value depreciates, the investor can bank on the gold value to rise, and when stocks appreciate, the investor will remain on the safer side.

7. Intrinsic value

Since ancient times, the intrinsic value of gold has been unshakable. Its current intrinsic value is not comparable to the market value because it is a non-cash flow. Coins and notes can artificially undergo adjustments, but gold’s inherent value is constant in the assumption that people will always accept gold without digging into its value.

8. Gold and market liquidity

Gold is a liquid asset, and because it is accepted globally, so it is effortless to convert to cash anywhere in the world. Any investor can also buy and sell gold anywhere in the world as they desire. This liquidity gives investors the platform to exchange money for gold and vice versa as preferred.

9. Gold insures investors against political decisions.

There may be many conspiracy theories around why governments freeze bank accounts and cut cash flows for some people, especially when an investor is undergoing investigations. An investor can alleviate the impact of this by selling off a portion of their gold. There have been incidents where the governments of different states pass laws that may impact their money value. In cases such as this, gold will stand the harsh political decisions test regardless of the investor’s location.

10. Gold is easy to store and maintain

Gold is non-reactive in the open air, and this makes its maintenance even more straightforward. Gold’s value can be in a small bar and be placed within the house or in a safe box, unlike having stacks of money in your safe box. You will save on space and the value of your asset. Investors do not require special techniques to take care of gold.

Gold has protected investors’ wealth by maintaining its value, and due to the enormous returns the investors get, they can stabilize their wealth. Gold value is not artificially adjustable, and so people have used it to get a status quo and demonstrate power. The higher the amount of gold possession one has, the higher the power. Gold’s influence on power and social status applies to different countries and also people categorically. Investors can use gold as a form of trade instead of dealing with bulky cash transactions, and in other cases, gold can be used as security to acquire other assets. Looking into these insights, an investor can measure the worthiness of the investment and its risks.

The post Is Gold A Worthwhile Investment? appeared first on Investor Relations Summit.

A quick little anecdote for you before we dive in. We’ve been hoarding sterling silver for years. I know that it’s only worth whatever spot prices are on any given day. For example, just go to google and type in something like “silver spot price today” and a chart will immediately show up in the search results and give you the day’s price and that will give you an idea of what it’s worth in “scrap value.”

So, at the time of my writing this post, for silver, it’s showing up for me in ounces – just over $27/ounce today; in grams – about .88/gram today; and in kilos – just over $877/kilo today. I happen to have about 8-10 pounds of sterling silver scattered throughout, which, today would mean that it would be worth about $3,000-4,000 give or take. To figure that out, you would take however much sterling silver you have, and then multiply THAT in ounces x .925 (because sterling is not 100% silver – it’s 92.5% silver).

Of course your next issue would be to find someone willing to pay you that for your collection! Most dealers aren’t likely to pay spot – they’re in it to MAKE money.

Would I prefer to have 8-10 pounds of 14K gold? Yup! But it’s a little harder for me to find these days. But, for giggles, let’s say I did have 8 pounds!

Google “gold spot price today” – and as of this writing, the numbers are: in ounces, gold is approximately $1970/ounce or roughly $62/gram. Let’s do the math. 8 pounds = 128 ounces. Remember that 14K gold is only about 58% gold ( Divide 14K by 24 [24K would be pure], then you’ll see your percentage) – so, 14k/24k = 0.583. This equals about 58%. So, now I multiply my “whole ounces” (128) by 0.583 (the actual purity I’ve got) and that will equal my “tradable” gold in ounces. So, in this case 128 x 0.583 = 74.624. Multiply 74.624 x today’s spot price per ounce of $1970 = just over $147,000! Bring it on!

Anyway, a person can dream, right?

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