Is it too late to get on the gold bandwagon?

Two months ago, when gold soared over $1,000 an ounce, I asked you if it was too late to ride the wave up.

Well now, gold is at a record $1,119 an ounce.

As you know, many financial experts and investors shy away from gold, believing it to be the haven for gullible insomniacs watching late night TV promotions.

But those insomniacs appear to be having the last laugh — at least for now.

The precious metal has been growing in popularity because of the U.S. dollar’s weakness and record-low interest rates.

Gold prices are up 7 percent this month and 26 percent for the year, the Associated Press reports.

So, let me ask you again — too late or not? Still time to make money or a bubble about to burst?

14 comments Add your comment

Buzz G

November 12th, 2009
7:56 am

Will you be asking the same question this time next year when gold is $1,800 an ounce and you need to pull out a ten spot to buy a gallon of milk and loaf of bread?

GeoffDawg

November 12th, 2009
8:25 am

The world runs on ball bearings these days.

Donovan

November 12th, 2009
8:51 am

Lets see-RE Values down 40%, Banks borrowing fromn taxpayes at 5% and in turn charging 30% on Credit Cards but turning down Business Loans to customers they had for 30 years. Gold sounds correct.

PMC

November 12th, 2009
8:57 am

Can I get in on the copper rush instead?

N-GA

November 12th, 2009
9:15 am

Gold is still a good hedge, but I believe platinum is better. Before the financial crash, platinum was consistently selling for almost twice the price of gold. Platinum is much more scarce and is the critical element in catalytic converters (auto pollution component). When auto sales finally rebound, platinum will soar!

Bacchus

November 12th, 2009
9:19 am

Gold averages 2.5% annual return over time. The stock market returns 10-12%. Gold has no utility other than to be hoarded and hidden.

rdh

November 12th, 2009
9:40 am

1) Gold has not yet hist the inflation adjusted top of $2200 set in the 1980’s.
2) Gold production has peaked. Unless new mines and sources are found, most of the gold in the world has been found and the amount is finite
3) As China, India, the Middle East and other nations become wealthy, their demand for gold is increasing
4) As currencies plunge, the demand for gold in those countries will increase.

I bought more than a few ounces at $270 per ounce in 2000. People said then that it would never go up. Central banks were net sellers of gold. When gold hit $330….$500….$800…$1000, “experts” kept declaring that the gold rush and the gold bugs’ days were numbered. Last week, the IMF sold 400 tons virtually instantly.

This run is nowhere near over. If you were asking this question at $5k per ounce gold, then I would say “maybe”. At $2200 an ounce, gold would merely equal the inflation adjust maximum it has hit in the past. $5000 an ounce would represent a 3% return on that investment if you had bought it at it’s max some 25 years ago. Speculators have been talking $10k an ounce for a couple of years, but that might be a bit optimistic. $5k/oz, though, is realistic. I am holding on to mine.

Chris

November 12th, 2009
9:50 am

Too late? Are you kidding me? The signs are everywhere that the dollar is headed down. You only need to look at the following quote from the AP article today:

““You just don’t see increases like this over the short term” that last, said Steve Condon, director of investor advisory services for Truepoint Capital in Cincinnati. “This isn’t materially different from gambling.”

….as if investing in paper stocks is not gambling. Who are they kidding. If you want protection from the dollar tanking – buy gold and don’t listen to what these stock peddlers are telling you. Inflation isn’t even here yet. The rise in gold is based primarily on the falling dollar.

So – if you think all the shenanigans that the federal government is currently doing are going to suddenly stop. Great – don’t buy. However if you have a brain – you need not worry at the current prices. These same guys have been saying “Sell Gold!”…”it’s topped!” …all the way from the $200’s per ounce.

Buy or don’t buy – your call – but the wise are buying.

WM

November 12th, 2009
11:27 am

Have you missed it? Maybe, maybe not. Everyone is jumping on the train **artificially** inflating the price and eventually gold will go sideways then fall. The Fed and other world banks can’t keep rates low forever. And the USD? It will correct itself. May not happen over the next months, but now Too many emerging markets are pegged to the USD. I think I’ll go short an ETF that shorts gold.

Dennis

November 12th, 2009
11:39 am

Does this mean that Michael Vick’s “Supporters” are going to start selling all their teeth?

Lloyd Braun

November 13th, 2009
10:00 am

According to financial experts and the ardent followers of political and financial trends Glenn Beck and Neal Boortz, there couldn’t be a better time than now for the gold band wagon.

There are many other very credible AM-radio political pundits who are also financial experts ( e.g. Mark Levine ), who strongly recommend buying some gold.

This seems very smart especially after the price has gone way UP!!! It will continue to go UP UP UP as are freedom and liberty goes down. That is why gold is good investment!
Mazel tov,
Brauny

DW

November 13th, 2009
1:30 pm

I was not aware gold traded on the fundamentals of “freedom and liberty”. Also note that back in 1980 when gold was $2200 (in 2009 dollars), interest rates were at 15-20% We are still a long ways off from this scenario. The CPI was recently negative! Maybe wait till it falls back to the $850 level and buy as a hedge..

Charlie B

November 15th, 2009
11:50 am

There are powerful arguments for and against. The truth is, no one knows. I have seen a number of highly regarded and astute gold bug analysts lately opining about an overvalued gold price. Others reasonably argue a strong long-term outlook for gold IF global fiscal and monetary policies remain in place. My advice would be to invest maybe 10-20% of your overall investable net worth in a basket of metals and commodities via one or more GOOD mutual funds. ETFs can be another means to this end for the do-it-yourself types. Of course, bear in mind, I have no crystal ball and this may be one of the most confusing economic environments EVER, so I’m as much in the dark as everyone else. But I do suspect this MAY be one way to hedge your bets. But if you want to buy into the gold rush, diversifying into other precious and industrial metals, along with a broad basket of commodities, may spread out your risk without hurting your reward prospects much.

DW

November 17th, 2009
11:08 am

@ CHARLIE B : I think GSG etf or GSCCX mutual fund would accomplish that.