Is it Right Time to Invest in Gold?

Is it Right Time to Invest in Gold?

The Gold price is crossing new and new heights. Right now When I am writing this article, the Gold price is US $ 1277 per Ounce means roughly Rs.19500 per 10 grams of Gold in India.

Many of my friends, relatives and readers of this blog ask me that, Should they buy the gold at this price or should they wait to cool down the price of the Gold?

Well, in my opinion, if you love this asset class and want to invest in this Asset class than go and buy at this level. This is because the Gold price may go even high from this level means $ 1500, $ 2000 or even more.

This is because the gold price has direct relation with the US Dollar. It has the direct relationship with the money supply (Money in the Circulation). So whenever the US Government will print more dollars, it will weaken the dollar by diluting the purchasing power of the existing dollars in the economy.

Since 2007, the US Government has printed well over $ 1.2 Trillion ($ 1200 Billion) and that’s why now the US Monetary Base (Money Supply) has swelled to more than $ 2 Trillion ($ 2000 Billion) from just $ 800 Billion before 2007.

And still the US Government want to print more money by giving economic stimulus packages in the economy. Right now the most of this newly created money is in the Bank Reserves. But when it will come out into the economic circulation, it will dilute the purchasing power of the existing money in the economy and thus driving the gold and other assets prices to the sky high.

So Buy Gold now if you want to invest in this Asset Class. No need to wait to cool down the gold prices.

Problem with Investing in the Gold

Well, If you ask my personal opinion than I will advise you to invest in Business (Online or Offline) or Real Estate. This is because the only problem with the Gold is that, it is the non-productive asset class. The only problem with investing in the gold is that, it doesn’t provide you any kind of cashflow as long as you hold it. So you will have to depend only on one kind of profit and that is Capital Gains.

This form of investing is little bit risky in my opinion because anytime the US Government can absorb the liquidity from the market and that eventually strengthen the dollar and causing the crash of the gold price.

So it is advisable to invest in cashflow + Capital gain assets rather than only Capital gain assets.

But well, it will require lots of Financial Knowledge to invest in the cashflow assets. So What I advise you is that Download my Free eBook – My Journey To Billionaire Club: What Rich Teach Their Kids About Money that Poor & Middle Class Don’t and increase your Financial IQ by several folds. And do the Investments like Rich.