GOLD

Good morning to everyone. First time in my blog, I am going to talk about investing. Today I am going to talk about investing in GOLD.

As you have seen, GOLD values have been steadily increasing. The reason I know of the following

1. Since dollar is going down in the values and uncertainties surrounding the sub prime mess , many investor would like to park their investments in the safe place. GOLD is one of the safe and liquid investment.
2. It is edged against currencies. Reserve banks around the world are printing more money to create more liquidity. This creates more supply on the currency and hence devalue the currency value against fixed asset like GOLD. I heard in the news that there are 52 trillion units of currency is floating around the world compare to 2 trillion units of GOLD. You see the demand here.
3. It is difficult to manufacture GOLD as compare to printing more currencies. It takes longer time for mining companies to set up the mining operation. This takes usually 8-10 years. This creates artificial demand. This is true for other commodities like SILVER, PLATINUM and COPPER.
   

My strategy on the GOLD is long term. I will hold it till end of 2009. I would invest GOLD in following ways

1. Buy GOLD future contract. Applicable to US market
2. Buy 'GLD' as ETF ( Exchange Traded Fund) which tracks actual bullion. Applicable to US market.
3. Buy GOLD bullion. Mostly applicable to Indian market. This way investor can make their spouse happy which revealing their underlying motivation.
4. Buy stocks of GOLD mining companies.
   

SILVER another good investment too. I will talk more about later in my blog.

In India, Sundaram and Reliance is planning to float GOLD specific mutual fund. Ping your money manager and ask them more about this.

See you later.

Mahadevan.L