Gold Investors Will Benefit From New Tool
posted October 26, 2009 - 6:15pmOne of the hardest things to determine about changes in the price of gold is whether or not the change was due to a change in actual demand for the metal or changes in the value of the dollar. Assuming demand stays the same, if the value of the
dollar increases, it will take fewer dollars to buy the same amount of gold so the cost of that amount of gold priced in US Dollars will decrease. Conversely, if we assume the value of the dollar stays the same and the demand for gold decreases, the price should decrease as well. The tricky part is when both the value of the dollar and the demand for gold changes simultaneously. I always had to look at the price of gold in several different currencies to get a sense of the demand for gold.
Recently the website Kitco.com introduced its Kitco Gold Index. This tool actually makes it easy for gold investors since it separates the effect of the change in the value of the dollar from the effect due to changes in the demand for gold. Now, I can tell at a glance and in real time, what the changes in the price of gold mean. This gives me greater insight into actual demand for gold and makes it easier to make investment decisions. I don’t routinely invest in physical gold, but I do invest in gold mining stocks. Knowing the demand for the miner’s product makes it easier to make decisions regarding those investments. I think this is a great tool and one that will be helpful for many gold investors.
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Comments
Good Strategy
That sounds like a good strategy to invest in physical silver and gold stocks. It applies a little more leverage to your investment funds. I, too, have a fair amount of physical silver as well as a little gold. I also hold AUY and GG currently. Have invested in ABX, GFI, and PAAS in the past as well.
Kidgas
My Blog: http://myonlineincomebykidgas.blogspot.com/
Gold Investing
I had never been able to figure out what part of the gold price was the dollar being devalued, sounds like it would be helpful. I'm a silver bug myslef, buying physical silver and only gold company stocks for that metal.
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Thanks for another informative article Kidgas.
You are welcome
Wdzzz. I have found it most helpful.
AAT2, right now in my hands at least, an ounce of gold is worth more. Who knows what will happen over the next several years? It depends on the traffic!
Kidgas
My Blog: http://myonlineincomebykidgas.blogspot.com/
Great information..great tool
Thank you for letting us know about this. Great article.
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What's worth more, an ounce of gold or ten decent, original monetised articles about gold?
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