Ok, I'm not trying to be vain or anything, but I grew up with gold as my play toys. Or rather, I love to slip them into my bedroom and sleep with them. Necklaces, bracelets, rings... jewelries of all kinds. You see, I was blessed with a very capable grandma who was a goldsmith. I used to live with her during my childhood and all I really needed to do was to open the cabinet while the adults were busy & I'd have had my 'toys' with me in no time. It's a cat & mouse game though, I'll have to give them back at the end of the day! No matter, the next day would naturally brought me new 'toys'. Those were the good old days!
It is interesting to note that while I was fascinated with gold as a child, most Chinese or Asians for that matter are still very much enthralled by the thought of owning gold. Be it as a form of savings, investment or jewelry. It is not uncommon to find lots of goldsmith stores in Hong Kong, China and most of South East Asian Countries. The Indians especially love their gold!
Jewelry As a form of jewelry, I actually like the Italian Gold more than the 22k gold. Pure solid gold comes in the form of 24k; mostly in the gold bar form. 24k gold is too soft to be made into jewelry, hence you'll find very little jewelry that's 100% pure gold. The Chinese gold is usually in the 22k form while the Italian gold is 18k. You can tell easily by its color. The less sparkling it looks, the more likely to be 18k or 16k.
Savings Gold is quite a good form of saving as it is especially good in times of high inflation. When oil price skyrocketed, gold prices go along with it. There is one loophole though, gold in the international market is transacted in the US$ and despite the increasing value of gold, at times, it's also offset by the ever decreasing value of the US$. Let me illustrate this, when my aunt bought her gold at the height in the 80s, it was around US$800+ an ounce. Today, it's more than US$1000 an ounce. You might have thought she made money in the last 20+ years. In actual fact, she didn't. Partly because the US$ has devalued and lost more than 50% of its value since then, perhaps even more, I didn't do a real calculation, & partly because the real value of money is a lot higher in the past than today (the time value of money). In any case, it is a lot better form of saving than the US$ dollar though, ie. cash!
Investment Some people prefer to invest or speculate in gold. One can do that via the Merc (Chicago Mercantile Exchange-CME), an exchange trading in all kinds of commodities. There is also the GETF (Gold Exchange Traded Fund). Your local banks may also allow you to buy 'paper' gold in the form of a certificate of ownership. Swiss banks are commonly known for providing such a service. As with any other form of investment, do remember that it is the time and price differences that make the real difference. What I'm literally saying is, do remember to take your profit!
Security Gold is essentially a safe haven during any economic, political or currency-based crisis. Having said that, it is physical gold that one should invest in. When it comes to a political crisis or bank-related crisis, be very aware of the risks associated with paper gold. Yes, these days, the banks allow investors to invest in gold with only some form of promises to pay but not delivering the actual gold. It may seem inconvenient to safe keep physical gold or even dangerous to do so at home, however when one really need the gold during a real life-threatening situation like a war or coup d'etat, you need the real gold! The banks won't be opened at all during those times.
As I've had some experience with this since my relatives live in Indonesia and during political crisis when you need to pay your way through to get out of the country, I'd recommend that those who live in countries which are not so stable like Thailand, Peru or countries that are subjected to bouts of political unrest, it is best to keep some Canadian Maple Leaf Gold or Credit Suisse coins in smaller denominations at home. I do believe they come in 1/10 oz, 1/4 oz, 1/2 oz & 1 oz denominations. These are not too expensive singly but they can translate to a matter of life or death some days.
Future of Gold
Well, the US$ is definitely going to worth less in the future. No doubt about it unless by some miracles US managed to invent something that the world needs, like a new form of clean energy or something that will save humanity! There are talks that gold will go to some US$2000/oz (Jim Rogers claimed that although he didn't state when). At current prices, I don't think gold is cheap to invest. On the other hand, US$ is neither a great currency to invest in either. I personally will not look into gold at today's prices. To me, perhaps the Chinese yuan is a better deal. However, having said that, it's common knowledge that you don't put all your eggs in one basket. Anyone who has ample money for investment or even simply for security sake should have some form of gold in their safekeeping. At the very least, it's something that won't go bust like Lehman did!
Ahh, I wish my grandma is still around :(
Latest Update (Nov. 10, 2010) NY Times: "Over the last two months, the dollar has declined 6 percent against its principal peers, but gold has jumped 17 percent."
In just less than 2 months, it has moved from a low of around $1500 to $1750+ (as of this writing) Gold is said to have become the unofficial reserve currency of the world! Uptrend intact with minor corrections along the way. Investors are loading up gold despite the fact that it's very much overbought at current level. Goldman Sach has put an immediate price target of $1860 while I do think that it'll hit at least $2000 in no time! Gold rules! Staggering losses … more
It amounts to cash, need i say more? It's called Yellow Gold in the Orient but when it comes to Gold, I prefer White Gold :-) When it comes to cash, I don't really care which form they comes in as long as it's valid!
Prices will keep going up as a hedge against the weak dollar. Whether to buy it or not is up to individuals and how much spare cash you have. Afterall, all investments should be made because you have spare money and not because you are greedy. Gold is expected to go up to US$2000 or more by many capital market experts. Adjusted for inflation, the former high of gold is supposed to be US$2300+. If you ask me, gold might still double in future if the U.S. economy and dollar do not improve!
Gold (pronounced /ˈɡoʊld/) is a chemical element with the symbol Au (Latin: aurum) and an atomic number of 79. It has been a highly sought-after precious metal for coinage, jewelry, and other arts since the beginning of recorded history. The metal occurs as nuggets or grains in rocks, in veins and in alluvial deposits. Gold is dense, soft, shiny and the most malleable and ductile pure metal known. Pure gold has a bright yellow color and luster traditionally considered attractive, which it maintains without oxidizing in air or water. It is one of the coinage metals and formed the basis for the gold standard used before the collapse of the Bretton Woods system in 1971.
At the end of 2006, it was estimated that all the gold ever mined totaled 158,000 tonnes.This can be represented by a cube with an edge length of just 20.2 meters. Modern industrial uses include dentistry and electronics, where gold has traditionally found use because of its good resistance to oxidative corrosion and excellent quality as a conductor of electricity.
Chemically, gold is a transition metal and can form trivalent and univalent cations upon solvation. Compared with other metals, pure gold is more chemically unreactive, but it is attacked by aqua regia (a mixture of acids), ...