Is Gold the new Green?
We are always keeping an eye on companies that offer potential, assessing possibilities and trying to bring you the best picks for your investment.
With so much going on in the economy it is hard to ignore the assessments and predictions surrounding gold. Whether it is a company like Yamana Gold (TSX: YGI) with some development stage properties or one of the more senior traded companies, such as Barrick Gold (TSX: ABX) , with 26 gold mines worldwide, the investment potential of this commodity cannot be ignored. Some others prominent on the stock market and actively trading include, Kinross (TSX: K), IAMGOLD (TSX: IMG), Goldcorp (TSX: G), Lake Shore Gold (TSX: LSG).
Whatever the future may hold for gold or how profitable these companies may be we must take into account the value of this commodity.
Lets take China for example. It is being reported that China now holds the world’s 5th largest gold reserve with 1054 tonnes. Considering there was a substantial amount of money printed into the U.S economy, in turn undervaluing the U.S. dollar, China could now be shifting their investment interests to gold. It is being reported that the Chinese government is urging its citizens to go out and buy gold or silver bullions. China’s state-owned television network ran a programme that informed people of how easy it is for them to invest in this commodity. China’s largest bank, ICBC, offers a personal gold trading account to facilitate gold trading. Unlike in the past, where investing in gold and silver was under strict control, the government has now loosened its grip and is urging its people to hold these investments. The bars are available in measurements of 500g, 1 kg, 2kg, and 5 kg, with 99.99% purity. China is shifting slowly from being the lowest per capita gold consumers in the world to being a significant investor in these precious metals. There are reports indicating that China will exceed India, who for years held the world’s biggest gold market, in gold consumption. Having a population of 1.3 billion, which is greater then 20% of the world’s total and with this new shift from the dollar to gold, this could easily become the case in the near future.
What are the reasons behind this shift? Does China know something we don’t? What does the future hold for gold? If a nation like China shifts their reserve from the dollar to gold this will undoubtedly have an effect on the global price of gold and could prove detrimental to the dollar. Gold is tangible, you can touch it, you can feel it, and there is only so much of it to go around, as for paper, well if we fall short we can print it and have more, making its real value more difficult to measure. If all that is being said is true, one way or another, it has to be a strong indication of gold prices to come.
So whether you think gold is the new green or all this hype will fade, it is important to stay informed through it all. Every investor is different and we all have different needs, so whether you invest for a reason, or a season or a lifetime, let www.picksthatmove.com help you stay informed.
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