Gold, Inflation, Other Factors!

By: Ian Campbell | Thu, Apr 12, 2012
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If you own physical gold, or are considering owning it, you ought to read Michelle Smith's article Gold: The Ultimate Hedge?(Reading time: 4 minutes, thinking time longer). A balanced article on physical gold, this April 11, 2012 article questions whether physical gold is indeed "the ultimate inflation hedge".

In essence, the article says:

I consider this to be a much 'better than average' article on physical gold price because it reports, doesn't take positions, and leaves the reader to consider whether he/she ought to amend his/her thinking about physical gold and its ownership.

My own thoughts having read this article are that there is little doubt:

And that said:

"some investors may be unaware, some may have forgotten, or others may even deem irrelevant the metal's broader history, as it often seems that we are experiencing unprecedented economic conditions"

has to be important. That said, unprecedented may be a strong term, as dramatic negative economic events have periodically been experienced in the past. A better way of putting it is:

'abnormal economic conditions in the developed countries as measured against economic conditions in those countries experienced in the last half of the 20th century',

Current economic uncertainty has to be impacting the gold price, and has to be being continually priced into the gold market as current economic conditions continue to evolve;

There are no sure answers to whether from here the price of gold trends higher or lower, or to what higher or lower price levels. The only certain thing about the price of physical gold is that, like everything else, there is uncertainty attached to it - and that conditions affecting it in the current economic environment can change every day for better or worse as world and country specific events unfold in ways that that influence world and country specific economic risk.

 


 

Ian Campbell

Author: Ian Campbell

Ian R. Campbell, FCA, FCBV
Economic Straight Talk

Through the Economic Straight Talk Newsletter Ian R. Campbell shares his perspective on the world economy, the financial markets, and natural resources. A recognized business valuation authority, he founded Toronto based Campbell Valuation Partners (1976), Stock Research Portal (2007) a source of resource companies market data and analytic tools, and Economic Straight Talk (2012). The CICBV* annually funds business valuation research in his name**. Contact him at icampbell@srddi.com.
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** through The Ian R. Campbell Research Initiative

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Source: The Contrarian Take http://blogs.forbes.com/michaelpollaro/
austrian-money-supply/