How well did certified gold investments do this year? Posted by James Randolph on December 09, 2010
Gold keeps shining.
December 09, 2010 – How well did certified gold investments do this year? Wall Street Journal’s Market Watch says it best: “Wrapping up a tumultuous year in the markets, it’s pretty clear that a chest full of metals would have made a dazzling portfolio.” Of course it wasn’t all smooth sailing.
Fear of speculation driving prices to unrealistic levels has been a recurrent problem throughout the year as big fund managers have taken increasingly stronger positions in the market. Commodity Futures Trading Commission (CFTC) data indicate that commercial investments tend to be short term, or speculative, and currently they account for a bit more than half of the open interest. Although that represents a strong influence on prices, it is balanced by the non- commercial and non-reportable participants, most of whom are in the market for the long run.
The threat is more pronounced in other markets, however, and the CTFC is seriously considering position limit regulations to prevent any speculative entity from controlling prices as the Hunts did with silver in 1980. For long term investors any such regulation would be welcome as it would help dampen market volatility.
Almost every week we have also heard some “expert” proclaim the gold market is topping off. While all sorts of “proof” have been offered, the most prominent has been that the gold price has reached record market highs and therefore must turn around soon. In the first place, historical market highs have no relevance in the global economy of today. In the second place, the record high adjusted for inflation is around $2,200 – we still have a long ways to go.
The bottom line is that gold’s performance has sound underpinnings and its solid growth is real. If speculative volatility is a concern, investment in certified gold coins offers the perfect solution.
Senior Staff Writer – Certified Gold Exchange