This year more than others, the price of gold has gone up for normally it takes 5 to 10 years before the price went from $3,00 to $4,000. When a commodity increases in price similar to gold the market leaders make more money, the secondary companies or junior companies have viable companies because at $4,000 most mines can actually make money. All around the world there are gold mines, most do not make money, because the process to get gold out of the earth has not changed a great deal in centuries. That means where gold mines are located, there will be arsenic pools which separate the gold from the earth. Would you like an arsenic pool in your backyard? hopefully no, but you like to see the gold.

In an article by Joe Rennison of the New York Times News Service, investors, money managers and central banks have been buying gold this year.

Gold is often seen as a haven during times of turmoil, is having its best year since 1979, when the prices surged over 100% during a period of high inflation, a depreciating dollar and a geopolitical crisis in the Middle East (the price of oil went up).

Gold has attracted buyers because other traditional havens such as the dollar and US government bonds, have lost some of their allure. The Federal Reserve will likely cut interest rates again, and the dollar has slumped 10%. Larger deficits in Washington have cast a cloud over America’s creditworthiness.

Ryan McIntyre, a senior managing partner at Sprott, an investment firm that specializes in precious metals, said uncertainty has largely driven the rally in gold.

Goldman Sachs noted exchange traded funds that buy gold have purchased over 100 metric tonnes of the precious metal in September. Analysts were expecting gold to reach $4,300 by year end.

Linking to dividend paying stocks, in all industries there are multiple methods to find safety in dealing with increased prices of commodities. The senior companies often pay dividends, there are companies that specialize in the industry, because unlike 1979 shortly afterwords the price of gold fell to a level, you needed to own for 10 years to make your money back. If you want to diversify your holdings, always do your homework to find the best in the breed.

There are more questions than answers, till the next time – to raising questions.