Gold is an attractive investment in large part due to its traditional use as a currency. In fact, for millennia it was the most liquid form of wealth you could get. In the United States this ceased to be the case about forty years ago, but gold is still seen as a pure form of money, and a safe-haven against swings in valuation.
However, it's very hard to argue the rationality of this confidence in gold because its utility in industry is very limited. Other than their traditional cosmetic role, gold and silver are not commodities in the sense that they facilitate economic activity.
My financial advisors point to gold as a niche "world going to hell" investment. Personally I'd rather invest in a recession-proof industrial sector. In the Apocalypse, the market for gold may not be very strong at all.
Re: Some good news today
Tenacious
5/1/2011 12:30:00 PM
We can only hope, right? But with increases in the prices of food and gas eating away any modest increases in income, it's clear we have a long way to go.
Re: Confidence
Bullseye
5/1/2011 2:29:05 AM
I agree with you. As the DOW sits at year highs I wonder if there is a bottom. Obama Plunge protection team hard at work.
Sonfidence inches up
impactnow
4/30/2011 10:58:06 PM
The gold “bubble” is a completely different investment issue from the housing market bubble which was caused by too many individuals gaining financing for homes they could not afford, artificially driving up home values. Gold is a commodity long linked to certain economic variables including currency valuations, political instability and inflation. While we may see gold pull back in the future if market fundamentals improve it will not “burst” like the housing market that was built on phantom home owner equity.
Confidence may soon be at an all-time high, what with gasoline on the rise, the housing market tanking, and 3 wars raging...of course I am joking, but you never know, it might get better
Re: Some good news today
PAW
4/30/2011 2:33:45 PM
Yep, it is a vicious cycle which will be made worse if (when) S&P lowers the US credit rating from AAA.
Re : Confidence Inches Up, But Remains Fragile
yalanand
4/30/2011 11:41:54 AM
Noreen, Home became synonymous with safety during those fearful days after 9/11.This time its "Gold" which is synonymous to safety. Will this gold bubble burst just like the "Housing bubble" ?
Re: Some good news today
AskAsa
4/28/2011 3:15:06 PM
Oh, I forgot to mention, guess what's holding people back from remodeling?
"many home owners are still slow to commit to remodeling due to feeling uncertain about the economic recovery and difficulty obtaining loans," said NAHB Remodelers Chairman Bob Peterson, CGR, CAPS, CGP, a remodeler from Ft. Collins, Colo.
Duh!!
Some good news today
AskAsa
4/28/2011 3:13:46 PM
Remodeling is picking up, and that's always a good sign. The National Association of Home Builders said today the remodeling index is back to the highest level since the fourth quarter of 2006. We're not out of the woods yet--the rate is still less than 50, which means more remodelers report market activity is lower (compared to the prior quarter) than report it is higher. But it's a sign of life anyway.
Some good news today
AskAsa
4/28/2011 3:13:46 PM
Remodeling is picking up, and that's always a good sign. The National Association of Home Builders said today the remodeling index is back to the highest level since the fourth quarter of 2006. We're not out of the woods yet--the rate is still less than 50, which means more remodelers report market activity is lower (compared to the prior quarter) than report it is higher. But it's a sign of life anyway.
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