Is Gold a Good Investment as of 8-25-2011?

It is now 8-25-2011 and stocks have been taking a nose-dive at the open. The Nasdaq and Dow are far off their highs and treasuries are surging. Is a gold a good investment in today’s precious metals market conditions or is platinum, palladium or silver as an investment a better choice? In the past 7 days gold hit another all time high of of $1,827, but gold fell yesterday the most it has ever since December 2008. What’s the reason for such a massive sell-off and what is the current long-term outlook..is gold still a good investment today?

What’s Going on With Gold?

A week ago all the markets were down and the big banks were experiencing massive dips in stock price. There was also a less than favorable report on manufacturing from the Philly Fed. News from the WSJ was that the Fed has been concerned about European bank funding because there was an unidentified European bank that borrowed $500 million in one-week debt from the European Central Bank (according to ECB data). This bank paid a higher borrowing cost than normal which caused all the European indexes to plunge, not to mention U.S. futures. These economic concerns pretty much led to gold hitting it’s all high highs.

Afterward, there was news that the Shanghai Gold Exchange hiked gold margins by 26%, holdings of SPDR Gold Trust (the world’s largest gold-backed exchange traded fund) fell by almost 25 tons, and rumors of hedge funds that were decimated by market volatility shorting cash.

This has caused gold to fall below $1800 once again and creates a tremendous buying opportunity. Many investors are starting to believe that due to the global demand for physical bullion that there is a strong possibility that gold’s correction could soon come to an end. Now is the time to act and step into the gold market.

» Contact Cornerstone Asset Metals today to learn more about buying gold as an investment.

Past performance is not an indication of future potential values.