Why Is Gold Insurance Against The Market?

“For psychological reasons, it appeals to investors as a wealth-preservation vehicle. In case of financial turmoil they turn to precious metals, the increased demand causes an increase in the price and gold and
silver deliver on their promise to provide an alternative to government bonds.

There is also another dimension to it: in the past gold coins and silver coins were used as money. As a matter of fact, gold had been indirectly used as money up to 1971 when U.S. president Richard Nixon officially announced that the U.S. government would cease to adhere to its promise to redeem the greenback in gold. Since that moment money has been only paper and a promise of the government to accept payments in it.

Some investors fear that excessive deficits as seen in the U.S. will result in money being printed on a large scale (which actually is already the case: open-ended QE) or even in the implosion of the dollar. The bigger the deficits, the more likely such a scenario seems.”  Article  Przemyslaw Radonski, FCA

This is an interesting article and will show you why the investors always own gold coins.  I would think that a good indicator for the decline in gold would be when the investors put their money back into production.  This will cause the employment market to spike up driving down unemployment.  We have not seen a large change in unemployment for years and it has not been good.  Hence, gold prices have been up and steady. 

Do you have insurance on your car?  Would you get it on your investment in stocks?

Kevin Robbins, http://www.goldsolutionsoffortmyers.com/contact.html#.USTuKFojpws

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