Gold is considered by many investors to be a safe haven and an inflationary hedge in times of economic turmoil
Port St. Lucie, FL (PRWEB) February 4, 2009
"Gold is considered by many investors to be a safe haven and an inflationary hedge in times of economic turmoil". Gold is also considered to be a type of insurance to protect against weakening currency valuations. Recent large fluctuations in many of the world's major currencies has pushed many investors to purchase physical gold, gold futures and options and gold ETFs to shelter them from currencies that are becoming worth less and less.
The current global economic problems have forced many nations to cut interest rates which often leads to weakened currency valuations. In the US record low rates and the printing of money should lead from the deflationary environment that is currently affecting the United States and the rest of the world to a hyper inflationary cycle. These record low interest rates should weaken the US Dollar even more and commodity prices are dollar denominated. If the US Dollar continues to weaken these US dollar denominated commodity markets may be pushed much higher. Energy futures, grain futures and the precious metal futures are especially susceptible to the inflationary pressures of a weakening US Dollar. Weak currencies and higher commodity prices may soon follow. Visit http://www.tkfutures.com/education.htm to learn more about the precious metals futures and options markets as well as other commodity markets.
Some countries and especially China are buying physical gold instead of US Treasuries. This lack of faith in the US Dollar by many nations may lead to even more hoarding of precious metals such as gold and silver. This may also lead to a massive selling influx of US treasury bills, notes and bonds. The selling of treasuries is in effect a selling or deleveraging of the US Dollar. This may also help to push gold futures prices higher this year. Visit http://www.tkfutures.com/research.htm to learn more about the most recent supply and demand news pertaining to gold futures and gold options.
Gold ETF investing may also help push gold futures prices higher as investors flee the stock and real estate markets. These exchange traded funds are mostly long only meaning that an investor can only bet on higher gold prices and not short the gold markets or bet on lower gold prices. These funds are required to offset their various gold ETF purchases by investors with either the purchase of physical gold or the purchase of the appropriate number of long gold futures contracts. This may also help push gold futures prices higher during 2009. Visit http://www.tkfutures.com/gold.htm to learn more about gold futures and options trading.
The author of this article is a 15 year veteran of the gold futures and options markets and the president of T & K Futures and Options, Inc. Gold futures and options trading carries substantial risk of loss and is not suitable for many investors. Only risk capital should be used for this type of investment. Visit http://www.tkfutures.com/products.htm to learn more about the various ways to invest in gold futures and options.