Like all commodities, buying gold is not for amateurs. You are going to get screwed on both ends of the transaction -- when you buy it and when you sell it.
The bull market for gold is already long in the tooth and there are signs that the market might already be saturated. See:
http://in.reuters.com/article/2012/07/16/precious-poll-gold-idINDEE86F0CE20120716
You should only consider investing in gold if you already have a diversified investment portfolio, and even then you need to go into the investment with eyes wide open and have a long-term outlook.
The problem with gold and other commodities is that there are so many different influences on price: currency fluctuations, supply, consumer demand, industrial demand. Predicting these markets is a crap shoot.
Granted the price of gold has shot up since 2004. However, if you had purchased gold in 1981 @ $700/ounce, you would not have gotten your money back until 2009 -- almost 30 years! Even if you had purchased gold during any of the intervening years, you would barely have maintained your dollar value vs. inflation.
People always run into a mature bull market thinking that the trend is going to continue to rise... That is how you lose money.
Edited 1 time(s). Last edit at 07/17/2012 12:04AM by Ito.
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