Gold Price

The spot price of gold is volatile.

Since the US dollar was removed from the gold standard in 1971, the gold price has experienced wild price swings.

gold price

Source: Market Calls

During the oil crisis, through to the Afghanistan invasion, the price of gold rallied from US$31.64 per ounce to US$666.50 an ounce, gaining over 2,000% in a decade.

The next gold price super-spike began in July 2005.

Hurricane Katrina saw many investors choose to invest in gold, causing the price to rise. Hindsight now tells us that this was the start of the next super-spike in the gold price.

The gold price was gaining momentum into early 2006. And it spiked to US$1,100 an ounce in March 2008 as the credit crunch crippled global markets.

Numerous forms of central bank intervention made investors feel safe. However, as the devastation of the financial crisis unfolded, the price of gold spiked again in 2008, peaking at US$1,900 in October 2011.

For short-term traders with an appetite for risk, gold can be a rewarding investment.

However, trading gold is not for everyone.

In saying that, there are many gold mining stocks and exchange traded funds (ETFs) that benefit from the long-term moves in the gold price, without the same day-to-day stomach-turning risks that affect the spot price.

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As we’ve always said about gold, we consider it an insurance policy. Just because we didn’t have a car accident yesterday, doesn’t mean we’ll cancel our car insurance policy today. But there’s another reason why the gold price has held up, and why it will soon hotfoot it higher again.

Kris Sayce: Uncensored

It's not very often Money Morning editor Kris Sayce has time for a chat. Luckily for us, he kindly agreed to sit down and reflect on the year that's been and the one that's coming. Including his investment strategy for 2013.
Money Morning Australia