Sunday, August 17, 2008

Gold Value versus The GreenBack

If you are considering investing in gold you may wonder "how am I supposed to invest in gold?". Some people will rush to buy gold jewelleries because they serve dual purposes; as an ornament and a great gift, it will appreciate in value – good investment.

However, today gold are traded everywhere, in the share market, in unit trust and also traded by banks. Some are traded on paper value while others actually provide you with gold bullion. Do your own research and find out what would suit you better and also look into the charges incurred upon buying and selling. Each trading house has their own percentage level of charges…. Get your investment money’s worth by trading with the lowest in charges….but be wary of the security level as well.

Take a look at this chart --- Gold & The Dollar --- (this chart is borrowed) and you will notice the movement of gold and USD is in the opposite directions. This is another guide for you to consider if you so decide to trade in gold.

Invest in Gold?

Have you heard of this term “Old is Gold”? When human grows old, their functions slowed, their values are compromised, their memories waned and their usefulness may be reduced tremendously. Then the term “old is gold” had been coined to add value to aging people. Gold then became the measuring tool. Why GOLD? As everyone knows, gold is an unfading metal of great and undiminishing value.

With that in mind, shall we say that “Gold” is a valuable metal sort after by all. In other words we can summarise that “Gold” has value. Lets take a look at how much the value of gold has been moving from year 2003 till current:

  1. 2003 - Gold at $382 dropped to $319 (-16%)
  2. 2004 - Gold at $425 dropped to $375 (-13%)
  3. 2005 - Gold at $536 dropped to $489 (-9%)
  4. 2006 - Gold at $725 dropped to $560 (-22%)
  5. 2007 - Gold at $841 dropped to $778 (-8%)
  6. 2008 – Gold hit $1002 on Mar 17 then dropped to $786 on Aug 15 (-21.5%)

If you look at the above trend, you will see the fluctuated percentage is highest at 22% in a year and this year, gold has hit top value at $1002 per oz and has dropped back to $786 on 15 August, a reduction of 21.5%. Question is …. Is it at its lowest? Also, is it time to invest in gold yet?

Lets take a look at gold price compared to oil price…. Is there a trend for us to follow?

Gold in USD

Oil in USD

31 January 2008



29 February 2008



31 March 2008



30 April 2008



31 May 2008



30 June 2008



31 July 2008



15 August 2008



Alright now, I have done a simple research and a true to life comparison, now you are the one to decide whether its gold you want to invest in and if yes, is it now that you want to go into gold….. the decision is yours to make and the money is yours to earn.

Happy Gold Hunting!!