Tuesday, May 13, 2014

Ukraine Turmoil Boosting Gold Prices, But Should We Buy?

Gold prices are a funny thing, the more turmoil and uncertainty there is in the world, the higher the value goes. Gold is considered a 'safe haven' investment. For thousands of years, and from civilization to civilization, gold has retained monetary value. So if you're worried about the zombie apocalypse, or Russia taking over the world - gold should be your investment of choice (or guns I suppose). That being said, as a US based investor, should I be running to buy gold because of something going on thousands of miles away? Can I make some money investing in gold right now?

At the end of the day, we're investors, right? If there is an opportunity to make a good return, then it's at least worth looking at.

So, is there truly an opportunity to make money investing in Gold today? I'm not convinced, but let's do some quick internet searches and see what some of the 'Gold Investment Experts' have to say.

When you start doing research about why you should buy gold, interestingly enough, most of the commentary happens to be from companies that sell gold - that, and the doomsday publications that try to get you to pay for their investment newsletters. Typically that's not a good sign, but I carried on, and this is what I found:

Forbes - 3 Reasons To Buy Gold Now
Money Morning - 1,600 Reasons To Buy Gold Now (Just in case 3 wasn't enough)
WSJ - The Case For Gold

Okay, now for the other side of the argument:

DoughRoller - 6 Reasons Gold Is A Terrible Investment
MarketWatch - Why Buffett Thinks Investing In Gold Is Stupid
USA Today - Gold: The Investment Dog That's Not Hunting

Personally I'm still not convinced gold is the investment for me. The fact that it doesn't generate any income, has limited commercial use beyond jewelry, and is really expensive, are all pretty big turn offs. At the same time, I feel like I should have at least a small portion of my portfolio invested in precious metals and other commodities. After looking at some other precious metals options, I did come across one that seemed pretty intriguing.

If I'm going to start buying precious metals, that precious metal is going to be silver. Silver might not get as big a boost in value as gold when the world goes crazy, but it does get some. The kicker for me, though, is that silver has so many more practical applications. Gold is basically used for jewelry, and that's it. Silver is still used in jewelry, but it has a ton of other applications as well.

Silver is used in all sorts of manufacturing, including computers, smartphones and televisions, among many others. In addition to being one of the best conductors of electricity, silver also has antibiotic properties that make it vital to the medical industry. The more I learn about silver, the more interested I become. Gold might not be for me, but if I decide to diversify some of my portfolio into precious metals, it's good to know there is another option out there.

This guest post was contributed by Sam Jenkins.

This guest article does not represent the views or opinions of NuWire Investor, or any of its subsidiaries.

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