One of the core factors causing these large swings is due in part to the political worries on rising inflation and the need to increase interest rates. Holders of paper currencies i.e. US$, such as Central Banks, particularly in oil exporting countries (some of which are unfriendly towards the US), China and Japan, will seek to gradually diversify away from the US$. Part of that procedure will almost certainly be an increase in the percentage of Gold held in their currency reserves.
People are getting hungry for gold again and there just isn't enough to match demand. Renewed global insecurity has sent people rushing into the safe haven of gold and the price has spiralled from $280 an ounce in 2000 to over $800 today.
The reasons for this move to gold are clear...
All these factors have led analysts to predict a steady rise in gold for at least the next 3- 5 years. While the price is at a 25-year high, it is still well below its $800 peak - which, adjusting for inflation, would be around $2,000 today - and it's one of the few commodities not to have hit an all-time high.
A portfolio should have some exposure to precious metals and you can invest in Gold in a variety of methods, including Mutual Funds,(Merrill Lynch Gold and General fund for example) or purchasing the physical metal from internationally recognised bullion dealers, but one method that is rising in popularity is the Precious metals investment program. One such programme is The Perth Mint Certificate.
Your investment is guaranteed, stored and easily tradeable across the world. The PMC is a way to buy precious metals and have them stored safely in Perth, Australia. You are issued with a Â‘Â’warehouse receiptÂ’Â’ which is non-negotiable but fully transferable and is guaranteed by the Western Australian Government. If you are interested in Precious metals or wish to learn more about this subject, contact Timothy Lock, Investment Director at Graydon Associates.