Gold Will Hedge Against Inflation

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Gold is a hedge against inflation and a way to preserve your wealth. The movements in gold have been huge lately. The rate of inflation is about currently about 10%, and its essential to be invested in gold coins, gold bars, and gold bullion.

Smart investors are getting into gold coins, gold bars, and gold bullion as the inflation rate rises to 10.2%. To protect yourself from rising inflation, its important to be invested in gold bullion, gold ingots, and gold bullion coins.

The gold demand is rising steadily with no end in sight. Investors looking to put their money into hard assets increased the demand for gold in 2008 by 64 percent. Countries who have added to their gold piles include Russia, India, China, and others. The IMF recently made a sale of 200 tons of gold to India.

The amount of gold available for each person is miniscule at 23 grams. That is only about $840 worth per person. The value of all above ground gold inventories is about $3.7 trillion, and is going up rapidly.

There is around–0,000 tons of gold above ground, and that number increases each year by 2,600 tons. That is an increase of about 2% per year, but that doesnt even come close to satisfying the demand.

Mine supplies have actually decreased by 10% due to suppressed gold prices. Since the fundamentals for the gold price put the price much higher than it has been, why has the price been suppressed?

The laws of supply and demand have surely been lacking, and not making much since in this market. In 2001 the price of gold was about $250/oz and the current gold price is about $1,040/oz. So, even though the price has risen significantly, economists suggest that it should be at around $7,000/oz due to inflation.

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Supply and demand have not played a part in these markets since price manipulation has been occurring. Even though the price of gold has risen to current levels of $1,140/oz, the inflation adjusted price puts gold at around $7,000/oz.

The answer is that there are a few factors that have caused this price suppression and they are still to blame. The central banks have been selling their gold supplies onto the open market in an attempt to suppress the price. It has worked, but central banks are running out of gold to sell.

Paper gold like exchange traded funds (GLD) and COMEX contracts only give you price exposure to gold. With these investments you do not really own the gold. Some investors have even complained that the COMEX is defaulting when customers request physical delivery of their gold. The COMEX does not have the gold they claim to have.

The way the default happens is that the COMEX will either give a cash settlement upon delivery, or shares of the GLD (exchange traded fund). Either way, you do not own the physical gold, which means that you are still holding paper. These paper investments have kept investors in dollars, which has fraudulently propped up the dollar.

All of these gold suppression tactics are starting to come unraveled, and with inflation setting in there is no doubt the gold price will continue to explode. Stay away from paper investments if you can, unless you know for sure that they are legitimately holding the gold. Stick with American Gold Coins, American Gold Eagles, and gold bars.

The falling dollar is enough reason to invest in gold. The current price of gold is $1,140/oz, and the price of gold per ounce one month ago was $1,058/oz. Gold is the only safe bet in this inflationary environment. You wont be sorry if you invest in gold now!

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