Gold is a play on the economy... plain and simple! As the leaders of the global economy (U.S.), the United States is the key indicator on movement. Knowing that other countries such as Russia, China, and India are all having their own economic woes, they follow pretty closely they path of the U.S.
If you look at the ETF - GLD (SPDR Gold Trust), having invested 10k in 2004 would've given you a total of 20k+ by today! Knowing this it is safe to say gold has faired pretty well over the past two years. Some other funds/stocks that would be a play on gold would be Yamana Gold and Royal Gold (AUY, RGLD). With the price @ 970 and headed towards 1,000, don't be surprised if it surpasses that mark. The key number that everyone is focusing on is $1,030. If we do break that number look for gold to run up.
Knowing that many of you have such investments in the financial sector among others would be to buy some shares in gold. It is a way to hedge your investment on the global economy. As many economists say " we will have another 2 years of stagnant growth", putting some money in gold isn't such a bad thing. Listen.... if you think the economy will continue to struggle, gold isn't a bad play! What we know about gold is that there is a value! How can we value any kind of stocks these days when ratios have become obsolete. We know that the numbers were inflated and still do not know the underlying effects.
I say to put some money in gold if you think the market will continue to be slow and another way to diversify your portfolio.
*Please feel free to respond with any comments or if you have any questions and requests for future posts.
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