The Yellow Metal Rises Skyward

Ah, gold! How the yellow stuff glitters! For centuries, men have sailed across stormy seas and trekked through steaming jungles to hack the ore from the rock. When people heard the cry “there’s gold in them hills!” echo through the California mountains in 1849, thousands streamed in to cash in on the gold rush. The lucky ones could smelt and shape it into jewelry or bullion currency.

Presently, gold is soaring to a peak price as demand surges. Investors increasingly seek to trade on this metal rather than on volatile stocks. The latter lose their luster, and with the global economic shake up of 2008, invest-ment returns from other instruments is uncertain. Equity markets are also slowly losing their charm alongside commodities in the slowdown. At this juncture, investors are searching for safe, value-adding investment instru-ments within their investment portfolio. More are drawn to the magnetic allure of gold.

Experts say that its gradual, steady increase in price directly derives from the investors’ lack of confidence in the world’s major currencies. This has triggered a move among them to put their money in a safe haven asset with “no sense of panic” -- gold. “Asolid gold investment sets you free from the risk of credit default or banking failures,” reassures a financial consultant.

No doubt, as market demand escalates, it immediately drives up the price. Reports indicate that gold has climbed this year, outperforming stocks, bonds and other commodities.

Is Gold Smart Money?

The answer is that investing in this precious metal is not limited because it can be sold anytime and anywhere. The trading function is smooth, it is easy to spend and constitutes an insurance against any extreme market shifts. Romantic fascination with the alluring shine also draws buyers.

Traditionally, Asian families kept much of their assets in gold as protection and investors gripped it as a shield against inflation. Experts now claim that gold is a strong hedge against against inflation, deflation, stock market weakness and other currency problems. In short, to hedge against financial uncertainties, this metal always serves well.

Gold mining companies worldwide now struggle to meet the climbing demand for gold jewelry and investment buys -- prices are rising. Although recognized as a pioneer in gold mining, South Africa’s annual output has halved since 1998, but new operations in China and Russia are growing.

Reports also indicate that the Chinese Government is encouraging its citizens to participate in a Gold Investment campaign. Beijing will expand the range of gold products available. The entire world is realizing that gold is always “real money.”

Why is Gold’s Price Increasing?

It has gone skyward amidst global uncertainty and turmoil in the world market. Its global market price has risen by 14 percent this year, outperforming stocks, bonds and other commodities. The cocktail of major reasons generating anxiety about the non-gold markets spans inflation and national currency fluctuations and the European debt crisis that sees Greece and others sagging under a boulder of sovereign debt on their shoulders. To be precise, now the demand for gold is high as investors fear losing out in the battle for sure profits.

Demand is rising. With Europe on the brink, plans afoot to hike taxes and a shake up in the U.S. credit system, having gold is the way out.

Additionally, ETFs that hold gold have steeply grown in recent years. These ETFs trade like stocks and track the price of physical gold. They are definitely boosting gold’s appeal and paving the way for investors to own vast amounts.

The current gold supply and demand also cardinally determines its price. For several years, experts observed that its price is significantly affected when major economic factors like inflation; changes in interest and exchange rates; a new central banks reserve policy and political and economic tensions strike. Traditionally, during inflation and currency devaluation, gold purchases grow and the demand and price are lock step.

Also, private sector investors fear inflation, currency depreciation and destabilizing economic challenges.

Possible Future Scenarios in the Asian Gold Market

Gold consumption regionally -- both jewelry and investments -- is expected to rise for years. Also, analysts strongly feel that the People’s Bank of China will continue its own buying program. Gold will generate lofty returns well into the future. Industry analysts believe that this rising long-term saving and investment demand for gold from China, India and others will be unabated for the next several years.

Also, this growth can encourage the development of new gold investment products and channels. Bank and retail shop systems for gold investments are growing. Alongside higher personal incomes and inflation anxieties, all this will influence the supply/demand trend and the metal’s price.

Factor in that for decades, global gold-mine production has turned downward. The current rise in gold’s price could trigger much more exploration and the development of new gold mining companies.

Let Us Know this Metal More

Compared to other minerals, gold is used the most based on its diverse, unique properties. Gold conducts electricity, is easily worked and shaped as wire or thin sheets and can be melted and cast into highly detailed shapes. It is popular for its unparalleled combination of chemical and physical properties. It is the only yellow metal and bears its name from the Old English word for yellow, or “geolu.” Among metals, only gold will never rust or tarnish -- it is forever.

Throughout history, various cultures have used gold to symbolize power, beauty, purity, accomplishment and especially a romantic sense of attraction or love. Today this metal has several applications in diverse industries.

Gold’s chemical symbol, Au, comes from the Latin word for gold, “aurum.” Pure gold is very soft and sustains the stresses of shaping. Alloying gold with other metals such as copper, silver and platinum increases its durability. The pure stuff is identified as 24 karat gold.

Other than for jewelry, this metal is used in the manufacture of electronics and as a drug to treat a few medical conditions. It appears in circuitry as a dependable conductor and connector and is a lubricant between mechanical parts. Gold, in both metallic and chemical form, acts as a therapeutic agent. The metal has been used for more than a hundred years to treat arthritis. Various research laboratories are also investigating whether it fights HIV/AIDS. Gold is also the metal of choice for religious objects. Medals and trophies, e.g. the Academy Award/Oscar and the Grammy Awards are all fashioned from gold.

Owning Gold Stocks Is Owning the Metal Itself

Global gold dealers report heightened demand for physical gold products like coins and bars.

Investors continue to seek refuge under a gold roof. Once they decide on gold, the immediate question is “how will this be the actual investment?”’ Afew might choose gold coins. The safest are pure in content and always command a good value. The only worry is tracking the dealer markup, shipping, and possible sales tax, plus coin storage and insurance. To avoid this, one can buy gold shares. These are the shares of gold mining companies. There is no worry about storage charges and they are protected just like any securities in a brokerage account.

Many people today opt for gold mining stocks for the leverage that they impart to gold’s price. Currently, there are over a thousand publicly traded gold stocks at various prices. Gold is considered a commodity. But it is still money among sane people. This metal is doubtlessly the ultimate storage of wealth -- beyond inflation’s destructive power. Today’s market has forced many to deem gold an investment vehicle. Interestingly, if an investor seeks leverage over the rising gold price, the best way is gold equities. The rising gold price eventually improves the mining companies’ profits -- sure to mean a higher share price for investors. Therefore, gold mining shares are traditionally considered very stable because gold performs well during both inflation and deflation and its stocks confer an investment edge.

However, gold is untraceable if it ever gets stolen -- so be careful! Investors must first perform some standard analyses to analyze the credibility of gold companies and simultaneously the gold itself. Also, it is essential to consider the cost per ounce of production and the gold reserves themselves. First understand this business, then invest in it, advises an analyst.

Are you curious about gold, but unclear what to do? Then visit the best Internet resources like the World Gold Council’s home page. It is a non-profit entity that gold companies fund to enhance awareness and knowledge of gold. Whatever the resources indicate, gold is no doubt becoming many people’s prudent choice.

With demand increasing, gold is truly the metal of today, tomorrow and the future. Yes, as in days of old, when prospectors risked their lives ranging over craggy African mountains or digging out the ore in a mile deep shaft in Peru, gold is always good!