Gold: buy in before it soars again

In a crisis, there's nowhere safer for your money than gold. And its current rally is far from over.

In a crisis, there's nowhere safer for your money than gold. It is an insurance policy against choppy markets and a real tangible asset, which is very useful at a time when people are losing faith in an ever-increasing range of financial instruments. The current gold bull-market started in 2001, when gold stood at $268 an ounce. Today it stands at more than $700 an ounce, and has just shot up even further in the wake of Fed chairman Ben Bernanke's half-point interest rate cut. But the rally is far from over.

Gold's safe-haven qualities are of course in the forefront of everyone's minds amid the credit crisis. But there's a strong supply-and-demand case for gold too. In 2006, according to the World Gold Council, demand hit a record $65bn. At the same time, production fell by a staggering 13%. And so far this year, the WGC's second-quarter report card has revealed that dollar demand for gold in the jewellery, investment and industrial sectors all hit new highs in the three months to 30 June. Jewellery demand was particularly strong, hitting a record $14.5bn, a 37% rise on last year.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free
https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up
Explore More
MoneyWeek

MoneyWeek is written by a team of experienced and award-winning journalists, plus expert columnists. As well as daily digital news and features, MoneyWeek also publishes a weekly magazine, covering investing and personal finance. From share tips, pensions, gold to practical investment tips - we provide a round-up to help you make money and keep it.