Is Gold a “Safe” Bet?

Is gold worth getting excited about?  This debate seems to continue on and Tuesday’s $1,000-an-ounce mark seems to have stoked the fire once more.  Is it a safe bet when currencies weaken?  The price of gold has historically been linked with the US dollar.  Dollar goes down, gold goes up – so goes the pattern.  But relying on gold as a safe bet could still be a risky strategy – after all, it is no secret that the price of currencies fluctuate constantly and often wildly so. 

Another ‘pro gold’ argument reasons that it could be the way to go if inflation kicks in.  This is a fear sweeping Britain as the Government’s quantitative easing programme continues.  However, many economists say that the risk is exaggerated by doom mongers.

The value of gold has risen by 20 per cent within the last year and there are plenty of investors keen to get involved.  But perhaps it is wise to bear in mind that gold, while being a worthy tool, may not be a ‘sure-fire’ way to gain big returns.  Always weigh up the risks!

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