What do you guys think of gold as an investment?

[roostercogburn]

My wife and I have recently purchased about 11K worth of gold. Our average buy price is at $650 per ounce. We have about another 15K of "mad money" we are not sure what to do with. We both have IRA's and money in some mutual funds. No debts outside of mortgage. This money is not emergency type funds. This is absolute "mad money". But I do not want to sit in a bank for 4%. With everything going on in the world, how safe are the banks anyways?

[roostercogburn]

Just looking for opinions. We may buy more if it stays below our average buy price line.

[martin_fierro]

Say Au PING

[kinoxi]

check your dollar depreciation charts next to gold increases. Gold is pegged(like oil) to the dollar and money can be made

[Cindy]

Laughing...

If you have already bought "11K" worth; you've already formed your opinion -- in my opinion.

Just an observation.
Carry on.

[umgud]

I have a freind in Nigeria...........

[smoothsailing]

Simply put, sell what you now own.

Had you bought it five or more years ago you would do more than double your money.

Gold will drop in the next six months.

I just sold mine, and I'm feeling fine! :)

[John Semmens]

Human creativity is the long term source of wealth.

This creativity has driven down the price of all commodities over time--gold included. (see Julian Simon's book "The Ultimate Resource" http://www.amazon.com)

Don't count on anymore than possible short term gains from gold.

[roostercogburn]

Um, yes. I formed an opinion on the 11K. Not on the additional 15K we are looking into purchasing. Thanks for the response smart ass.

[jwh_Denver]

The banks are safe now but you'll only get 1/2 to 1% over inflation at best. I recommend a no load gold stock mutual fund called USERX

http://www.usfunds.com/marketing/tiffany_gold/gold_tiffany_v3.asp

It is rated the top performing fund for this year.

http://moneycentral.msn.com/investor/partsub/funds/topfundresults.asp?Category=All&Symbol=$HF

Gold stocks will rise more in % than gold will and will lose more % if gold goes down. So unless you have gold stocks already this would be a great way to go unless you want to search out gold stocks on your own.

JMHO, I believe gold will correct down to $610 to $630 and then it will rise. It may consolidate for a period of a month maybe 2 before it begins its next leg up. For gold stocks I believe the bottom may very well be in but if not I don't see a lot of downside risk. Gold and gold stocks are very volatile right now.

You are very wise to have physical gold.

[kinoxi]

i don't wager in metals currently. thanks for the info though...

[Cementjungle]

Just remember "buy low, sell high" and you'll do just fine.

[Cementjungle]

You are very wise to have physical gold

That's what I plan to do, buy some ingots when the price drops a bit. More as a hedge against some real disaster in the economy than anything else.

[Nova]

"Just remember "buy low, sell high" and you'll do just fine."

Exactly.

[Jim Noble]

It's not an investment.

It's a life raft.

[HockeyPop]

For the most part gold is pegged to the dollar. If the market perceives Fed tightening by more than a quarter point then I'd want out. Recently a couple of Fed governors came out with differing views: first one says a half a point and a day or two later another says there may not be a need as previous Fed hiking have yet to fully have their affect (lag). The global run up in hard commodities (metals) and oil has been percieved as inflationary. My take is that these forces have yet to work their way through the economy.

Gold is a hedge and most financial consultants will tell you it should not exceed 5-10% of one's portfolio. It can be played by investing in the mining stocks. Barrick and Newmont are two of the biggest cap domestic companies. Know that hard gold (bullion) is usually bought at retail and sold at wholesale. Of course, if the shit hits the fan and the dollar becomes worthless then it makes sense to own gold coins. But if that ever happened it probably would make more sense to invest in underground tanks for gasoline, nat gas, etc. Not to mention bullets and pistols which likewise could be bartered during such a time. I'm sure some, especially of the Libertarian stripe who see the world through a different lense will tell you to go whole hog. Unfortunately, those who wear their politics and ideology on their shirt sleeve make for bad investors.

[PeoplesRepublicOfWashington]

Why do you think Au will drop in the next six months, and how far do you think it will drop?

[jwh_Denver]

"More as a hedge against some real disaster in the economy than anything else."

It will serve as a great hedge but also, IMO, serve as great investment on rate of return.

[HockeyPop]

No way would I invest in a gold stock mutual fund. You cannot get out of a mutual fund intraday. Instead, go with an exchange traded fund referred to as an ETF where you can place sell stop limits (or buy stops if short). IAU and GLD are two to look at.

[DocRock]

I wish I had bought some Rhodium a couple of months ago... or a year ago.

[PeoplesRepublicOfWashington]

The banks are safe now but you'll only get 1/2 to 1% over inflation at best.

You're losing money in the bank once you consider that the government, since Clinton, underreports the inflation rate by about 2.7% per year. A substantially higher inflation rate than most are aware of, a declining dollar due to supposed conservatives spending like unrestrained liberals, and a high demand for commodities from emerging second- and third-world countries are what's pushing the price of Au up.

If you are a believer in open and responsible government here at home, don't buy Au. If you believe emerging countries will be content with economies far less lavish that what we currently enjoy, don't buy Au.