Forgive me for my diatribe, but if I hear one more person lauding about gold breaking $1,000, I think I might just throw this computer out the window.
Don’t get me wrong, I’m not saying gold is a bad trade. Theoretically, with shorting, options, buying, and so many other trading methods, anything can be made into a good trade, short-term…
but less not kid ourselves. People are acting like this is the first time gold breached $1,000, BUT ITS NOT. In fact, we have been in this position 3 others time and have swiftly been rejected. So whose to say this time will be any different?
The truth of the matter is that you really can’t buy gold directly anyways. That is unless you are directly buying and selling actual tangible gold, but I assume most of us are not. Yeah, you can invest in gold though related stocks, ETF’s, and whatever else, but when compared to something like oil, these securities just don’t move the same.
For one, oil is something we actually need and use everyday. It’s price eventually effects gas prices, which more consumers have to deal with. Thus, impacting related stocks and other investment options greater than those of gold. While both gold and oil are non-renewable resources, when is the last time you heard somebody worried about the shortage of gold?
Its just not the same.
Yeah, gold is used to back currency, but lets face it… the U.S is in huge debt so how important is gold really? Today, it seems like countries are just printing paper.
Personally, I feel the “investment idea” behind gold is rather outdated. Sure, it is an important commodity, but sometimes things are just too big to really make anymore useful gains or moves.
For example, look at Microsoft (MSFT). As boring as the stock may be, nobody can deny how important the company and its products actually are. Does that make it a good trade by today’s standards though? No, because it just doesn’t have much more it can do.
Listen, I’m not saying gold can’t head higher… although I doubt it will. The point is that I really don’t think it matters. The play is stale, and I’d rather direct my money elsewhere.
Check out 5 more reasons why gold could be a bad trade.