The Current Price Of Gold Keeps Rising

Similar to all investments and commodities, the current price of gold is in the end driven by supply and demand. A lot can be learned by understanding what the rising dollar price of gold means.

Thousands of years ago, gold and gold items were buried with pharaohs to use in the after-life because gold is free from corrosion or decay. Gold and silver meet that test while paper money does not. Today, gold investment is seen as attractive in times of economic uncertainty and oil-led inflation. Gold is really the only viable alternative to the dollar. Gold is bought and sold in dollars, so any decline in the value of the dollar causes the gold prices to rise.

Instead of concentrating on the dollar price of gold, one might wonder about the depreciation of the dollar. Never let it be said that higher oil prices and profits cause inflation. Inflation of the money supply causes higher prices. Gold prices are surging which reflects the dollar's devaluation and is warning us to pay close attention to our fiscal, monetary, and foreign policy. When the gold price rises sharply against a country's currency, as it has against the dollar, it points to trouble ahead for that country's economy and monetary policy.

Accurate predictions for the future price of gold are an exercise in speculation. Should the the price of gold burst through the $1,000-per-ounce barrier, many experts predict it could reach higher records and even double. The weakening dollar and troubles in the financial markets have driven current price of gold to record highsand it might be headed to well beyond $2,000 per ounce.

What Percentage Off My Assets Should I Invest In Gold?

No matter what the current price of gold is, there is no one answer for this question. Often, personal finance articles tell you that individuals may want to invest anywhere from 10% of their portfolio to 30% in gold.

Someone who is more optimistic about the economy would be more likely to want to invest toward the lower 10% level. Gold is much like an insurance policy against the economy and someone who feels that good times are ahead would want to have less "insurance". Someone who feels there are dire times in front of us whould be interested in investion more toward the 30% level or even higher.

Gold investment will alway be a secure alternative to stocks and bonds. Traditionally, gold has been a favorite of wealthy European and Asian families who have opted to keep a significant percentage of their wealth in gold. This investing style has also become a favorite of many U.S. upper class families who want to make sure their future is secure.

With stocks going down for much of 2008, many are turning to gold and gold stocks for security. Gold investing has been getting more and more attention as investors flock towards safety. The current price of gold may still have many years of upwards growth if this trend continues.

Why Invest In Gold?

No matter what the current price of gold is, the question might be asked "why invest in gold?" Historically, gold investing has been a proven method of maintaining value when stocks are going down, inflation is occurring, and/or the national currency is being devalued.

Investing in gold is like having an insurance policy. If you fear that rough times are ahead, investing in gold would be the right thing to do. Gold is now almost at $1000 per ounce and many people predict it will continue to rise for some time.

Although gold has done very well for the last 5 years, it did not do well prior to that. The 80's and 90's saw very little movement in the price of gold. This is something to take into consideration when deciding whether to invest in gold. Nothing is guaranteed and the current price of gold may not hold as it is already historically high. However, for the concervative investor who wants to protect themselves from inflation and the falling stock market, gold is a good choice for your investment dollar.