Investments in Gold: Will Gold Continue to Rise

Nervous investors all over the world have many questions. The question, “Will Gold Continue to Rise?” is becoming more popular. With gold at over $1400 an ounce we are in unknown waters. This question has more significance than whether it is a good time for gold purchases. It signifies your faith or lack thereof in the economies of the World. If you are unsure of what I’m talking about , then you should continue reading. You can see gold price today for more information.

I will take a moment to explain the basics of the economy, financial markets, and how precious metals interact to regular readers. You need to be familiar with the following facts if this is your first time reading about it.

Around 5000 years ago, gold was the currency.
Current world governments used paper to replace money. However, their value was only accepted as a note that could be exchanged anytime for gold by the owner.
The relationship between these “notes”, or gold, was set by the government. The rate was between $20-40 an ounce for many years. This official government price could be “swapped”, meaning that one ounce gold could be “swapped”.
In order to spend the dollars they can print, the governments had to have gold in reserve. If the nation’s budget was estimated at 20 billion dollars and gold’s official price was $20 per ounce, then the government would need to keep 1 billion ounces worth of gold in reserve. i.e… The Gold Standard.
The official first step to relax the rules and allow officials to spend more, without having to collect more money, would be to alter the official price for gold. If they had 1 billion ounces of gold in reserve (many believe long before this they stopped following these rules and stored less than they were directed to by law), and they changed to an official price from $20 to $30, they just added $10 worth of value to their supposed holdings of 1 billion ounces of gold…presto-change-o, $10 billion dollars of extra cash in their coffers.