Whatever They Say, Gold Is an Investment

You may be tired of seeing these one-track-mind investment ‘gurus’ lecturing you that gold is not an investment because its money, just as they are always spouting off about your house not being an investment because its your home. What utter nonsense. money can be an investment, and as you know, many property owners were fortunate enough to sell their houses in the boom and downsize or move to a less expensive area. If that was not an investment, I don’t know what was.

The rationale for saying gold is not an investment is the claim that gold is money. Yes, I won’t disagree with that….. but if you’re holding a piece of ‘money’ which has purchasing power increasing over time, that just has to be a good investment. You can look at it another way as well. The cash in your pocket or bank account is losing its purchasing power, while gold and silver are increasing theirs and buying you more goods. If gold is money, this money is increasing in value.

Even money can be viewed as an investment. Take the last 10 years in the Japanese economy. People in such a deflationary environment tend to save just when the economy needs them to spend. And the reason they save is because their money is increasing its purchasing power when deflation reigns. They believe holding on to their money gives them more purchasing power when they need it.

To be honest I’m not going to get pedantic about whether the gold we hold is money or an investment. For the past 10 years gold has increased in value against all currencies. Perhaps we could call it a liquid investment

The other determinant of whether gold is money or an investment, is how you, the owner of the gold, looks at it. Do you keep that gold bar under your bed or in the bank vault with a view to selling it when the price of gold doubles, or have you bought it as insurance to keep you alive when the currencies collapse and there are riots in the streets? How you view your gold holding determines what it is to you.

Just to carry the analysis a bit further. You may hold 2 bars of gold, one to sell when the price shoots up, and one to keep in case of emergencies. This would mean you were holding an investment and an insurance policy.

However you view your gold, it looks as if we are approaching another buying opportunity in gold and silver. Right now the gold price is just a fraction below the 23.6% Fibonacci retracement line. If gold continues to fall on Monday it could end up at $1230 or if it retraces down to the 50% level could end up around $1270 before reversing the short-term downward trend. Either of these levels are good points to start accumulating your gold holding/investment! Gold Report