The lure of gold

One of the classic luxury commodities since the earliest of times, gold has always been synonymous with the lust for wealth and all it stands for. As a tangible, physical representation of wealth, opulence and power it has adorned palaces and temples from Sumeria and Egypt through Rome and the absolute monarchies to the present day.

Gold is desired in jewellery and decoration, utilised in high tech industry and hoarded by those who wish to safeguard their wealth. Its appeal lays both in the beauty of this strong yet malleable metal and in the limited supply in relation to demand. To economists, it is above all a reliable economic indicator.

Today, when the world’s economy is only slowly re-emerging from a period of shock and uncertainty, gold’s lure shines brighter than ever. The fact is that gold, as a sure and solid store of wealth, stands firm against the ebb and flow of time, economic growth patterns and political strife. Somewhat neglected during buoyant times, when investment flows into stocks and real estate, this noble metal regains its lustre as the markets plummet and economic insecurity takes over.

It is at times like these, or during periods of war and political insecurity, that prices soar from around the $300 per ounce mark to heights of $1000 or more. The recent failure in the financial markets has seen the metal surpass the magic $1000 barrier in a rally not experienced since 1980. Worries about the way the financial bubble burst towards the end of 2008 have produced demands for a return to the gold standard, by which currencies are measured against bullion reserves.

Such a dramatic move would create even more demand for gold, which is experiencing a parallel boom in private, second-hand trading, yet even without it the gold market is currently on a high. With a gradual economic recovery on the way, stock markets and real estate will slowly but surely resume their natural domination of investment flows, yet though it now seems to have peaked in price, gold remains a safe store of wealth – so it could be a good time to indulge in some trinkets of your own.

New post on at Wednesday, 30 September, 2009, 7:06 am and is archived in Lifestyle, Luxury. Subscribe to answers with RSS 2.0 feed. Both comments and pings are currently closed.