QUOTE AND NEWS
WA Business News  2 hrs ago  Comment 
Gold prices rose on Monday as the US dollar turned lower, but caution over the prospect of a potential escalation in the China-US trade dispute, upcoming US data and US Federal Reserve meeting minutes kept prices in a range.
MarketWatch  7 hrs ago  Comment 
Gold prices settled higher Monday, for a second session in a row as tensions between the U.S. and Russia raised the metal's investment appeal despite strength in the U.S. stock market. "Geopolitical tensions have shifted into another gear" after...
Benzinga  8 hrs ago  Comment 
Gold surged in value throughout Friday's trading session while stocks were hard hit. Should this trend continue, it will serve as an ultimate test for stocks, according to Piper Jaffray. The Analyst Piper Jaffray chief market technician...
Reuters  12 hrs ago  Comment 
India's gold imports in March halved from a year ago to 52.5 tonnes as a rally in local prices to 16-month high slashed demand in the world's second-biggest consumer of bullion, provisional data from precious metals consultancy GFMS and bank...
The Economic Times  10 hrs ago  Comment 
The Hindu Business Line  Apr 9  Comment 
The legendary but on the wane Lee Chong Wei was one of the casualties as a rampaging Indian mixed badminton team claimed its maiden Commonwealth Gam
MarketWatch  Apr 9  Comment 
Gold prices climb Monday, for a second session in a row, as U.S. tensions with Russia and China raise haven demand for the metal.
MarketWatch  Apr 9  Comment 
Need to Know: Gold is a religion, not an invesment, claims Mark Cuban




 
TOP CONTRIBUTORS

This article is about investing in the commodity gold. For the article on the company with ticker GOLD, see Randgold Resources (GOLD). For other uses, see Gold (Disambiguation).

Gold is one of the most highly-sought after precious metals in the world. It is used in jewelry, electronics, and coinage. Gold is widely considered to be an effective hedge against inflation, which means that when the dollar depreciates, demand for gold increases. In addition, during times of economic and political uncertainty, the demand for Gold rises due to its high intrinsic value and relative stability. Moreover, the introduction of gold ETFs and the increasing wealth in emerging markets, such as China, India, and Latin America have contributed to rising demand for gold. While demand for gold has been rising, supply has been dropping as many of the top gold producing countries have had decreasing production over the past few years.

Gold has been used as money for more than 3,500 years as it doubles as a currency and a store of value. Gold is one of very few assets that is not the obligation of someone else. It has also proven to be a good hedge as inflation since the experiments with unbacked fiat money began in Europe and the USA in the 18th century.

Prices

Gold futures contracts are traded on the COMEX under ticker symbol GC and are delivered in January, February, April, June, August, October, and December of every year. (For more information on commodity tickers, check out the commodity ticker construction page.)

Investors Gold

A soft metal with a characteristic deep lustrous yellow or yellow-brown color. Au chemical symbol, [1] with the chemical element of atomic number 79, valued for use in jewelry and decoration, and to guarantee the value of currencies. The purest form of money, and the oldest, most durable. Gold, Aurum was already legal tender before the first coins. The oldest gold coins derive from the seventh century BC.

Investors use Gold as a store of value. Gold metal offers the appearance of capital appreciation compared to depreciating currencies. Gold has always had favorable liquidity, but Gold is sterile, it does not provide any current income. [1] Gold does not provide positive cash flow to the owner. Gold owners must pay to maintain, store, and insure Gold, which is an expense. On a cash flow basis Gold a liability, Gold costs you to own it. [2]

As an example, if returns were adjusted for inflation from 1802 to 2001. $1.00 invested in stocks would have returned $599,605.00 while bonds and bills would have returned $952.00 and $304.00. The results for investments in gold and the US dollar would have resulted in losses, since that $1.00 investment in gold would have been reduced to 98 cents and the US dollar only seven cents. [3]

Companies Who Benefit from Rising Gold Prices

Gold Companies

  • DRDGOLD (DROOY) is the fourth largest gold miner in South Africa. South Africa is the world's top gold producer after India.
  • Goldcorp (GG) is a gold mining company based in Canada that has the lowest cash costs of any tier 1 mining company. It is the 5th biggest gold producer.
  • Harmony Gold Mining (HMY) is the 5th largest gold producer in the world, is the largest gold producer in South Africa and also has mines in Papua New Guinea.

For a complete list of companies involved in the gold industry, see Gold Industry

Gold Exchange Traded Funds

Most gold ETFs buy gold as backing for the fund. [4]

Other Gold Exchange Traded Funds

High End Jewelry Companies

High end jewelers actually benefits from rising gold prices because as prices rise, gold jewelry becomes a more valuable and coveted option.[9]

Companies Who are Hurt by Rising Gold Prices

Low to Mid End Jewelry Companies

Low to mid end jewelry companies tend to suffer from increasing gold prices because the company's lower income clientel are less flexible to price changes.

Individual Consumers

In addition, individual consumers are hurt by the rise in gold prices as they are no longer able afford it. This is particularly true for cultures which rely on gold articles as a symbol or key aspect to ceremonies.

Historical Gold Prices

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Whether as the basis for the monetary unit of a country, or in its role in comparison to the currency price of silver, the history of gold price has long been a subject of great interest to both the scholar and the general public.

Below are five series for determining the value of gold price historically:

Gold Futures

References

  1. A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing by Burton Gordon Malkiel ISBN-10: 0393062457 pg359
  2. Rich Dad Poor Dad by Robert T. Kiyosaki ISBN-10: 0446677450 pg61
  3. Equities: An Introduction to the Core Concepts (Mark Mobius Masterclass Series) ISBN-10: 0470821442 pg 16
  4. Have gold ETFs bottomed
  5. Wikipedia:Gold Exchange-Traded Fund
  6. Wikipedia:Gold Exchange-Traded Fund
  7. Wikipedia:Gold Exchange-Traded Fund
  8. Wikipedia:Gold Exchange-Traded Fund
  9. High Prices as Good as Gold in Jewelry Market
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