Wednesday, October 04, 2006

Investing in Gold

I have been contemplating the thought of investing in gold over the last few months and have decided to turn down the idea for a while. Gold has had a recent run-down in price as a result of what many people think is profit-taking. Gold is up near a 80% gain this year and has pulled back about 35% in the last month (these are approx. figures).

Where is the upside?
Some think it's time to get in... I'm going to wait. The Fed recently held interest rates steady so does this mean inflation is dwindling? It's possible. Gold is great to hold when there are strong economic inflationary powers because it's a great hedge against it. The Dollar's strength is also stable or increasing - another downside for gold. I'll wait to invest in gold, the risk is larger than I am comfortable with, while the upside doesn't look very promising.

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