Gold Rush Is Still On…but How Long?
Feb 13, 2011 4 Comments ›› Grizz
Gene Allen knows his way around gold…as a color. He co-owns an industrial paint company, and a bright golden yellow is particularly popular with some of his clients. As an investor, however, Mr. Allen didn’t touch gold for decades. And for good reason: The 56-year-old remembers the metal’s 20-year losing streak.
“I didn’t know how to invest in gold, and none of the bankers I dealt with knew either,” he says.
His financial adviser was just as shy — until earlier this year, when he changed his mind and encouraged Mr. Allen to start buying. So he reluctantly put $150,000 of his portfolio in new American Eagle gold coins. He has already made a decent profit on the investment, but he’s not exactly happy with it. Gold’s value will probably go up, but it’s “more just a hedge,” he says.
Forget Ugg boots, Glee and Sarah Palin. If you follow the markets, you know that America’s biggest obsession these days is with a shiny old friend. Though gold’s price has tapered off lately, as recently as January it was hitting record highs, prompting everyone from hedge-fund managers to barbers to talk about the yellow stuff.
It’s not just talk, either. Americans increasingly want their own personal hoard, and they’re buying up coins, bars and bullion at a breakneck pace and storing it in bank vaults, hidden safes or other places perceived as safer than a shoebox. Over the past year, Americans have bought more than 100 tons of gold, spending an average of $81 million a week on the stuff. That doesn’t include the billions more spent on exchange-traded funds that track the price of gold.
But this isn’t a stereotypical gold rush or even a typical investment mania. Yes, people are buying gold in record amounts, but in many cases they don’t feel good about it.
Some are upset about having missed gold’s massive price surge over the past decade and are worried about buying too late. Others fear they’ll be targets for robberies or scams, or be branded as crackpots by friends and neighbors.
ReadMore-http://is.gd/sMBs5X
