| Did you
know though, that everyday individuals, just like you and me
can buy pure gold bars, gold nuggets, even gold bullion,
gold ingots, 999.9 gold and 1oz gold bars very quickly and
easily over the internet and online from highly reputable
and totally trustworthy sources?
Would it surprise you even more if I told you that some of
the best deals that you can get online for buying pure gold
bars, can be found on your old favorite marketplace of all
time in our modern age – Ebay? Astonishing isn’t it?
The answer though is Yes You Can!
Someone, just like you can buy pure gold bars and find them
for sale, right now on eBay. And with eBay’s Positive
Feedback Trader Rating system, there really is no reason for
you to be afraid of buying from upon this marketplace.
Invest in gold for your own future and the future of your
family today! Here we provide you with the: Top 3 Reasons To
Buy Gold … pure gold bars, gold nuggets, gold bullion and
gold ingots for investment purposes or just for the joy of
owning this most valuable commodity known to man.
Gold is an independent asset, it moves quite independently
from the economic cycle. It’s really not too hard to
understand this since one must consider the sheer diversity
of it’s supply and demand base, this is afterall, the
penultimate determining factor of price movements in the
market place.
Commodities tend to typically fall during economic
recessions, since the raw materials used in the production
of non essential goods and services declines. However, the
demand for gold, in comparison to other commodities is
actually quite small. In 2007 just 14% of gold demand came
from the industrial sector which was mostly, electronics.
This is in great contrast to base metals and even other
precious metals where the greater demand comes from
industry. The upside of this is that gold is not so
susceptible to the vagaries of the general economic market
conditions. With that being said however, the demand for
gold in electronics is likely to fall if the overall economy
does in fact fall into a full blown recession. as consumer
spending on electronics naturally falls with it.
Recession in the US would without a doubt have some negative
implications for the gold jewelry demand in North America,
as consumer spending slowed down. All is not lost however,
far from it as regards gold investing is concerned since
this would at least be offset by the increased share of gold
jwelery within the rail sector. Added to this point, gold is
actually much less vulnerable than other jewelry materials,
such as diamonds or platinum to a US recession as far
greater demand for gold comes from outside of North America
– 70% of diamond jewelery demand comes from the US, compare
this with just 10% for gold.
The final source of demand that comes from investors
themselves, people like you and me. Investors buy gold for a
huge number of reasons. One of the chief reasons amongst
these are gold’s inflation and dollar hedging properties,
both of which factors have been proven for a very long
period of time. How a recession affects investment demand
would depend, in part, on how inflation and the dollar
react.
The upcoming and brewing recession has so far been rather
positive for gold on both fronts. The dollar has continued
it’s downward slide, while inflation has unusually enough,
headed higher. U.S. consumer prices increased at an annual
rate of 4% in February this year, up from 2.4% just a year
earlier. If trends continue as they are, investment demand
for gold as an inflation and dollar hedge is very likely to
remain strong. And if the recession does deepen it’s affects
amid concern over the health of the U.S. backing sector, the
demand for gold as a safe haven asset is also likely to
remain most robust.
What does this mean for you? Gold is right now, one of the
most solid investments that you could consider making, is
the message in a nutshell.
If we look at the supply side, there are three main sources,
1/ Mine production. 2/ Official sector sales and 3/ Scrap or
recycled gold. Mine production by far is the biggest element
from these three. This accounts for a full 70% of total
supply in the last year. This upward trend in mine supply of
gold production that was by way of example underway in the
1980′s was not stopped by the 1990 recession. The U.S.
economy suffered an outright contraction, while world GDP
growth slowed to 1.6% from 2.9% the previous year. Nor was
the downtrend in mining output that began in 2001 reversed
by the sharp acceleration in world growth that followed.
Mine production of gold is influenced by very specific
factors, for example the level of exploration spending, the
success or otherwise in the discovery of new gold deposits
and the actual cost of extraction and processing, which
actually means that some new deposits are not worth their
weight in gold, extracting from source. The lead times in
gold mining are often fairly extracted and prolonged
affairs, it can take years to re-open a formerly dis-used
closed mine, let alone further expenses incurred from
finding and mining new gold reserves.
Another factor is the Central Bank themselves and their
strategic decisions to buy or to sell gold, decisions which
tend not to be reactive to the economic cycle. These
decisions by this body are usually made several years in
advance and are then carried out over a timespan of years
according to their own plans, for strategic purposes. In the
country of Switzerland for example, the proposition to sell
gold, or the first gold sales program, was first recommended
by a group of experts in 1997. However, the actual sales
program did not even begin to commence proceedings until the
May of 2000, with the sales then taking place over a period
of 5 years, such was the confidence in this commodity to
deliver it’s long term gains and profits for them. If this
is good enough decision making on a strategic basis for
them, this tells you that the long term investment for gold
bodes well for you also.
Gold scrap supply is influenced by many factors, the most
important of these perhaps being price and price volatility,
however recessions and periods of economic distress have
also had an impact. To demonstrate, one of the most dramatic
examples was when Korea was pushed into recession during the
1998 Asian currency crisis, it’s scrap supply increased by
almost 200 tonnes as the government then bought gold from
the local populace in exchange for won denominated bonds. It
then went on to sell the gold upon the international market
in order to raise enough dollars currency to avoid
defaulting on it’s external debt.
In summary, a U.S. recession does not have any negative
implications for the gold price thanks to the unique drivers
of gold demand and supply. The only element of gold demand
that could be affected by a recession is investment demand,
but that in turn will also depend to a large part on the
actual ‘type’ of recession. So far, the brewing recession
has been positive for gold investment purposes as it has
been accompanied by a rise in inflation and a falling
dollar, which has boosted the demand for gold as a dollar
and inflation hedge.
Mark P Andrews is the co-owner of GoldsGold.com http://www.GoldsGold.com
– A great resource online for buying gold, pure gold bars,
gold nuggets, gold bullion, gold ingots, 999.9 gold, gold by
the gram or gold by the ounce, gold claims, gold mine
shares, gold prospecting equipment, gold nuggets, gold
prospecting equipment, gold sluices, gold dredgers, gold
drywashers, gold pumps, gold metal detectors – in fact, if
it’s related to gold, we very highly likely have it
available on our web site – check out the link right now for
further details!
http://GoldsGold.com |
