On his recent television interview on the CNBC channel, Jim Rogers strongly expresses his advice for the people not to sell their gold just yet. He further proves his point by stating that gold reached an all-time high of $850 per ounce in 1980 but today it could reach $2,400 per ounce with adjustments made for inflation. Rogers also strongly believes that the price of gold will go much higher than the predicted price within the next ten years. He believes that the reason for this is that the governments of different countries all over the world are creating more money for their own economy. If the dollar has a high volume in the market then the result of this will be the decrease in its value. If the supply of the dollar is high then its value in the market will be lowered as a result. If the value of the dollar is low then the effect of this will be the increase in the value of gold.

Jim Rogers states that he does not plan on selling the gold that he owns mainly because he plans to use it as a form of insurance policy against anything that might happen to the economy. He is also against selling gold anytime soon because he believes that he will be able to earn more for his gold in about 10 to 20 years from now. Rogers also states that the Fed has already elevated the supply of money in the market and will be buying more stocks and bonds in the QE3.

During the interview, Jim Rogers was also asked why the popularity of gold has faded after the debt crises in Europe. His response to this was that he believes that gold is always inversely related to the market. He further explains that the state of gold is often the exact opposite of the state that the market is currently in. He also states that gold has been able to regain its strong footing in the market together will all other forms of assets. Jim Rogers strongly affirms that gold has been doing very well in the market for 11 years now and it will continue to do so in the coming years.

This metal has proven to be of worth in all fields and its rarity and purity have made it a great material for representing ideas such as love, decoration and even power depending on how it is used. The appeal of gold took over most regions of the world in ancient times with the greatly impacted civilizations being ancient Greece, Egypt and Asia. The craftsmen discovered the great value of the material, with its ability to bend and hold different shapes providing the inspiration to create golden pieces worth millions.

Besides having the ability to bend into various shapes, it was also discovered that gold could be mixed or combined with other metals to make it stronger and more durable without necessarily interfering with its value. This combination of gold with other metals has since made it possible to come up with gold pieces that suit the different needs in the market as there are many people who cannot afford to buy items made of pure gold. Nowadays there are purity measurements in the market to indicate the degree of mixing the gold has undergone. The number of carats of an item indicates the percent of gold used in its making with 24 carats being pure gold.

There are important historic gold pieces that still have great value and are therefore treasured. Some of the most famous pieces are the Mesopotamian Headdress which shows the great skill of the ancient craftsmen from the area now known as Iraq. There is also the Mold Gold Cape, the Griffin Armlet with its human and animal features and the Byzantine Marriage Ring which was made many centuries before diamond engagement rings became popular.

Other historic pieces are the Renaissance Gold Chain, the Cellini Salt Cellar, the Egyptian Revival jewelry of the 1920’s and the Lalique Swallow pendant-brooch. The Passe-Partout jewelry created during World War II and the Babeto Gold Cuff also make the list of the most historic and treasured gold pieces of the world.

Gold is still gaining value in the world markets and more so in the jewelry industry as people want to own these precious beautiful items. Some have the need to identify with a certain class of people and have actually managed to do so by investing in gold pieces. This precious material also forms the basis for a great amount of trade.

Some may want to move their money into the market now before we hit the third phase, as the third phase tends to create large gains, and then stay to the very end to reap when the burst begins. This choice, of course, is extremely risky even if you think you have it calculated.  No one can predict when the bubble will burst.

It is possible that buying gold coins still has some life left in it.

The futures market

This market, as the term implies, is all about future performance. It predicts that gold will continue to rise for the next couple of years. This would indicate that the market thinks that gold is currently still under performing and hence it should not be about to burst any time soon.

Signs of the times

The usual outlook of an industry that is about to burst its bubble is often bullish but this is not indicative of gold according to those at Wall Street; even if two-thirds of the industry is bullish, that is considered a very restrained outlook according to Wall Street standards.

No one can guarantee that the gold bubble will burst or not but this seems to be the general trend today; a lot of bubbles waiting to burst, each taking its turn. For instance, the central banks of every nation seem to be pouring liquidity into the market which in turn devalues the various currencies.
But not gold; it is the one and only unprintable ‘currency’ with many followers and supporters to claim victory when the time comes while mocking their skeptics.

As you cannot define gold’s value in terms of the current standard of financial measures, it can be easy to be unrealistic about its value. But there will be plenty of ways to value it as economic strategists think that the current global conditions will set off one more gold boom, like the one experienced in 1970s. Again, confidence in the Greenback would drop and central banks will resort to hoarding gold again. As it is happening, central banks are currently the biggest purchasers of gold since 1988.
It has been calculated that with the high gold price of today, the US government is holding very little gold to back the US monetary system – some estimate the government no longer has gold as it hasn’t been audited since the 1950′s. Now, that is worrying.

Gold possesses a many unique properties; it is considered the truest form of currency which has been used over many centuries. The gold price today is correlated to the US Dollar which sets the platform for trade on a universal basis.

Physical gold comes in rare coins and bullion where both have about the same gold content but rare coins have an extra niche due to their rarity factor. With a sufficient supply for the demand, these rare coins are an easy positive asset.

Gold can be used to preserve wealth unlike paper currencies which fluctuate in value depending on monetary policies. Gold value will increase when the dollar value decreases through inflation. Hence, your money in the bank is less in worth over the years as gold value has increased.

Storing Gold

There are many ways to store gold; small pieces can be hidden away from prying eyes as gold weight determines its value whether in big or small quantities. Although small pieces do not take up a lot of space, their value is tremendous with the increasing spot price today.
Physical gold possession gives another form of protection against economic disasters where purchases can be made with the shiny metal that will preside over currency.

The spot price is the current price to pay for any gold bullion purchase with a small premium. Purchases from trusted brokerage organizations will ensure authentic gold whereas online purchases may not offer the purest gold coins.

Gold’s spot price fluctuates everyday depending on the supply and demand factor as well as the dollar value. This metal’s spot price is displayed on the right sidebar at the ITMTrading.com website.

Gold Prices

Today, the factors which affect the gold price positively are set in motion by economic crisis, inflation fears, quantitative easing and banking failures. Rare gold coins are preferred over gold bullion in building a gold portfolio as the former have been excluded from confiscation in the past by law and it is also considered to be a private asset.

Purchases should be made at established brokerage firms for gold ,like ITM Trading that has been providing excellent service for more than 15 years and has an A+ rating from the BBB.

A common mistake made by new or novice investors trading gold is referring to the futures price of gold rather than the spot price. The futures price refers to the market’s price quote generated for a certain quantity of gold delivery which normally is about 100 ounces at some point in the future. The futures price of gold is usually higher than the current spot price as storage, delivery and finance charges are to be included because there is no payment until delivery is done.

Another common mistake with gold trading by investors is the neglected transaction size. The more the number of transactions, the more time, effort and expense incurred by the broker compared to one transaction of a larger gold quantities.
Consistency in Spot Price

There is the ‘morning gold fix’ and ‘afternoon gold fix’ which refer to the spot prices of gold at different times of the day. An inexperienced investor may misunderstand that the terms refer to the same spot price which is untrue unless the gold investor is an important client of the major gold trading institutions.

This tradition was set over 400 years ago when London was set as the world’s center of gold trading where both big gold producers and their consumers transacted with major gold-trader banks meeting twice every business day to determine the gold price for their main clients. Bankers would agree on a ‘fixed’ price which matched their sellers’ volume to their buyers’ volume; once at 10:30 a.m. (the ‘Morning Fix’) and another at 3 p.m. (the ‘Afternoon Fix’) London time. Other gold dealers worldwide would take the latest ‘fix’ as their transaction benchmark price until the next ‘fix’. Nowadays, the fix prices are similar to the latest or most current spot price which can change at any time depending on the futures exchanges.

The Big 5

The top 5 banks which meet 2 times every business day to determine the gold ‘fix’ are Deutsche Bank, Barclays Capital, Société Généralé, Scotia Mocatta and HSBC Bank, USA.

Buy or Sell at ‘fix’ price

It is not possible for an ordinary or small investor to transact gold at the ‘fix’ prices as the gold value per ounce is extremely high which only major bank customers can deal in. Most gold investors can only handle smaller quantities and accumulate their gold collection in that manner.

Gold is as important to an individual as to the US portfolio as the demand for this shiny metal was only 11% in the US between 2004 and 2008 whereas the remaining 89% demand was not accounted for to appreciate the metal’s true worth.

There is a clear global demand for gold in different forms; jewelry made up 68% demand in the last 5 years with major players like China, Middle East and Turkey which comprise 50% demand and US, India and Europe commanded 20% of gold in the form of coins and bars while Japan picked up the balance by using the metal in its industry.

You will get a myopic view of gold’s worth if you are focused on the demand of gold as related to the United States alone. Other big players such as top countries contribute a major role in pricing gold on a worldwide platform that influences global inflation, currency supply and demand as well as the global velocity of money, which in turn direct the future worth of gold.
Money versus Gold

It has been proven that gold remains stable and not very affected by bull or bear runs in the stock market; hence the varying financial assets of the world seem to have little impact on the shiny metal.
The important factor that impacts gold prices in the short or long term is the dollar. Hence, when gold prices dip, the dollar increases in strength and vice-versa. Gold has what is termed a negative correlation to the dollar. This shiny metal can outperform bond markets, stock markets and real estate valuations as observed since the 2007 economic crisis. Gold prices have been climbing up every year since.

On the other hand, money supply is increased when the economy booms to keep inflation away or when it is necessary to stimulate the ailing economy. But this is precisely the issue that could not be resolved amicably as reflected in the 2007 financial crisis when the depth of inflation could not be pinpointed with all the monetary policies set in place. Higher inflation still sprouted.
Reality Prices

In reality, gold prices are usually on the increase whether there is any increase in the demand for money or not. When the economy is booming, more wealth leads to more demand for gold products while gold is considered an asset that hedges against inflation in an economic recession which devalues paper currencies. Gold is more than an investment; it is an asset because it is a physical possession regardless of form as gold value has never touched zero.
Market conditions may change over time; it is important to appreciate the relationship between gold and currency set in the ever changing economic situations. A focus on the entirety of gold demand will lead to a better decision on the right time to purchase some of the shiny metal.