Are you looking to do something different in your portfolio? Of all the investment products out there, stocks, bonds and mutual funds nothing seems to command the airwaves like gold. Gold has been around since ancient times in the form of jewelry, statues, commercial and religious applications and as money. It is its value as money that we are discussing now. That value is derived primarily from its scarcity. All the gold ever produced equals only 161,000 metric tons. To put some perspective on that approximately 15 million metric tons of copper is produced each year! Although new quantities of gold are twice what was being extracted in the 1970’s, that amount has not increased in recent years and has, in fact, fallen slightly even with much higher price realizations.

Gold’s value as “currency” has led to much greater interest in the yellow metal as an investment. In addition to its monetary worth, gold’s price is affected by a number of outside forces. These seem to have led to the recent higher price and the belief among some that it could still move up significantly. And everything seems to be making its influence felt at once. Those forces are:
· Concern over inflation
· Economic weakness
· International turmoil
· Commodity markets in general

One can invest in gold several different ways. A number of firms sell gold coins at prices which reflect the market level per ounce plus fees for the transaction. One can also buy stock in gold mining companies but the prices of such stocks do not necessarily move with the price of gold. Gold can even be an IRA investment subject to the usual limitations on tax deductibility and on income.

Is gold investing right for you? Physical gold does not pay interest or dividends. So its value is more in terms of a store of wealth or the security of having something you can “hold in your hand”. And over a longer period of time the equity market has outperformed the price of gold. But gold could continue to go higher while some of those outside forces depress bond and stock prices.