Gold. The very name of gold excites people just like you.
Did you know though, that everyday individuals, just like you and me can buy pure gold bars, gold nuggets, even gold bullion, gold ingots, 999.9 gold and 1oz gold bars very quickly and easily over the internet and online from highly reputable and totally trustworthy sources?
Would it surprise you even more if I told you that some of the best deals that you can get online for buying pure gold bars, can be found on your old favorite marketplace of all time in our modern age - Ebay? Astonishing isn't it?
The answer though is Yes You Can!
Someone, just like you can buy pure gold bars and find them for sale, right now on eBay. And with eBay's Positive Feedback Trader Rating system, there really is no reason for you to be afraid of buying from upon this marketplace.
Invest in gold for your own future and the future of your family today! Here we provide you with the: Top 3 Reasons To Buy Gold ... pure gold bars, gold nuggets, gold bullion and gold ingots for investment purposes or just for the joy of owning this most valuable commodity known to man.
Gold is an independent asset, it moves quite independently from the economic cycle. It's really not too hard to understand this since one must consider the sheer diversity of it's supply and demand base, this is afterall, the penultimate determining factor of price movements in the market place.
Commodities tend to typically fall during economic recessions, since the raw materials used in the production of non essential goods and services declines. However, the demand for gold, in comparison to other commodities is actually quite small. In 2007 just 14% of gold demand came from the industrial sector which was mostly, electronics. This is in great contrast to base metals and even other precious metals where the greater demand comes from industry. The upside of this is that gold is not so susceptible to the vagaries of the general economic market conditions. With that being said however, the demand for gold in electronics is likely to fall if the overall economy does in fact fall into a full blown recession. as consumer spending on electronics naturally falls with it.
Recession in the US would without a doubt have some negative implications for the gold jewelry demand in North America, as consumer spending slowed down. All is not lost however, far from it as regards gold investing is concerned since this would at least be offset by the increased share of gold jwelery within the rail sector. Added to this point, gold is actually much less vulnerable than other jewelry materials, such as diamonds or platinum to a US recession as far greater demand for gold comes from outside of North America - 70% of diamond jewelery demand comes from the US, compare this with just 10% for gold.
The final source of demand that comes from investors themselves, people like you and me. Investors buy gold for a huge number of reasons. One of the chief reasons amongst these are gold's inflation and dollar hedging properties, both of which factors have been proven for a very long period of time. How a recession affects investment demand would depend, in part, on how inflation and the dollar react.
The upcoming and brewing recession has so far been rather positive for gold on both fronts. The dollar has continued it's downward slide, while inflation has unusually enough, headed higher. U.S. consumer prices increased at an annual rate of 4% in February this year, up from 2.4% just a year earlier. If trends continue as they are, investment demand for gold as an inflation and dollar hedge is very likely to remain strong. And if the recession does deepen it's affects amid concern over the health of the U.S. backing sector, the demand for gold as a safe haven asset is also likely to remain most robust.
What does this mean for you? Gold is right now, one of the most solid investments that you could consider making, is the message in a nutshell.
If we look at the supply side, there are three main sources, 1/ Mine production. 2/ Official sector sales and 3/ Scrap or recycled gold. Mine production by far is the biggest element from these three. This accounts for a full 70% of total supply in the last year. This upward trend in mine supply of gold production that was by way of example underway in the 1980's was not stopped by the 1990 recession. The U.S. economy suffered an outright contraction, while world GDP growth slowed to 1.6% from 2.9% the previous year. Nor was the downtrend in mining output that began in 2001 reversed by the sharp acceleration in world growth that followed.
Mine production of gold is influenced by very specific factors, for example the level of exploration spending, the success or otherwise in the discovery of new gold deposits and the actual cost of extraction and processing, which actually means that some new deposits are not worth their weight in gold, extracting from source. The lead times in gold mining are often fairly extracted and prolonged affairs, it can take years to re-open a formerly dis-used closed mine, let alone further expenses incurred from finding and mining new gold reserves.
Another factor is the Central Bank themselves and their strategic decisions to buy or to sell gold, decisions which tend not to be reactive to the economic cycle. These decisions by this body are usually made several years in advance and are then carried out over a timespan of years according to their own plans, for strategic purposes. In the country of Switzerland for example, the proposition to sell gold, or the first gold sales program, was first recommended by a group of experts in 1997. However, the actual sales program did not even begin to commence proceedings until the May of 2000, with the sales then taking place over a period of 5 years, such was the confidence in this commodity to deliver it's long term gains and profits for them. If this is good enough decision making on a strategic basis for them, this tells you that the long term investment for gold bodes well for you also.
Gold scrap supply is influenced by many factors, the most important of these perhaps being price and price volatility, however recessions and periods of economic distress have also had an impact. To demonstrate, one of the most dramatic examples was when Korea was pushed into recession during the 1998 Asian currency crisis, it's scrap supply increased by almost 200 tonnes as the government then bought gold from the local populace in exchange for won denominated bonds. It then went on to sell the gold upon the international market in order to raise enough dollars currency to avoid defaulting on it's external debt.
In summary, a U.S. recession does not have any negative implications for the gold price thanks to the unique drivers of gold demand and supply. The only element of gold demand that could be affected by a recession is investment demand, but that in turn will also depend to a large part on the actual 'type' of recession. So far, the brewing recession has been positive for gold investment purposes as it has been accompanied by a rise in inflation and a falling dollar, which has boosted the demand for gold as a dollar and inflation hedge.
Mark P Andrews is the co-owner of GoldsGold.com [http://www.GoldsGold.com] - A great resource online for buying gold, pure gold bars, gold nuggets, gold bullion, gold ingots, 999.9 gold, gold by the gram or gold by the ounce, gold claims, gold mine shares, gold prospecting equipment, gold nuggets, gold prospecting equipment, gold sluices, gold dredgers, gold drywashers, gold pumps, gold metal detectors - in fact, if it's related to gold, we very highly likely have it available on our web site - check out the link right now for further details! [http://GoldsGold.com]
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