A shadow behind its prime
The precious yellow metal known as gold, has been regarded time and again as the most valuable element on Earth as well as the most useless at the same time in a periodic sense. Also, gold has been used as a store of value during the earliest civilisations but recently has been considered more of a massive store of risk.
For instance, selling a real estate property and waiting to move into a shared ownership retired home by putting say $100,000 proceeds from the said appraised value of the property into gold but during these times of economical and market instability would placed the actual proceeds down to approximately $20,000. Clearly, gold is but a shadow of its former self during the time when it was at its pinnacle.
Everything that gleams
Several decades ago after the Islamic revolution in the Soviet invasion of Afghanistan, demoralised investors piled up their investments into the precious metal. The cost skyrocketed to $850 an ounce despite the surge in purchases which later collapsed to just $250 when the panic buying subsided which stayed relatively within the same range for the next two decades.
With the credit crisis hit, gold was able to come back into favour, as it generally does during times of financial turmoil. It was only the early bidders who ultimately enjoyed the shimmering profits and it was only six years ago when gold was being traded near the $1,000 per ounce average which further broke the $1,500 barrier which then prompted several analysts that it could further hit $4,000 within the next five years.
Gold will eventually fade
Last 2011 when the spot price topped nearly $2,000, it rescinded back to $1,245 which plunged down to its lowest level since 2009. With the recent four-month low, now could be the best time to purchase golf as the ongoing political instability in the Ukraine could quickly force the price up any time soon as well as any number of events such as the fall of the euro, the Chinese property crash or the U.S. debt crisis would result in the sudden rise in the price of gold.
Optimistic options over bullion
Investors who are not afraid to take the added risk can opt to join similar risk taking investors in placing their bets on exchange-traded physical gold funds such as the SPDR Gold Trust (NYSE: GOLD. US) ETF, which has declined more than 5 % in the previous quarter but its year-to-date is still up 3.3 %.
Another alternative is the Gold Bullion Securities (LSE: GBS) which is also down around 5 % over the course of the recent months which is being traded at $119 with a positive year-to-date returns of 1.5 %. The question that is still left unrequited, will gold price set to rebound? Apparently nobody knows for sure, traders should basically treat it as an optional diversion and it is unwise to place all savings into it.