Gold Mining Stocks Are Back On the Rise – Is Gold Next?

The price of gold is hovering around 1340/oz and bottomed out under 1200.00 two months ago…is this the turn upwards for gold?

Many analysts think so. One indicator is gold mining stocks. Some of the larger digger stocks are up as much as 25% vs their 2012 lows. Most market makers think that this bodes well for other smaller players and gold itself.

It bears watching as gold has returned 17% for the year thus far.

While there are of course, no guarantees when it comes to diversifying your portfolio, it’s important to remember that the same purchasing power gold had in 1905, it still retains today.

Seriously. If you had a 1oz gold coin (worth$20) in 1905 and you chose to buy a suit, a hotel room, get dinner and a movie (or in those days a theatrical production) you’d spend a little more than half of your gold.

If you had a 1oz coin today (worth $1340), you could still buy al those things, a suit, a hotel room, dinner and a movie and probably you’d spend a little more than half of your money…so regardless of whether the dollar is up or down against gold, the purchasing power of gold remains the same. This is the beauty of the yellow metal. It RETAINS its value.

Currencies come and go. There was a time when the Spanish peso was the world currency, and before that the Portuguese, the Dutch and the French were dominant in world finance. It’s only a matter of time until the United States, for so long ascendant in its position, slips and with it will go the almighty dollar.

This is not to say that the dollar will not have a place, along with some other currencies in world banks, but just that everything runs its course. At some point, the dollar will no longer be the dominant currency in the world.

That day may be a ways away, but it’s important to remember whatever currency is used as the world’s yardstick, gold will measure up pretty nicely.

Houston Gold Merchants buys and sells all types of gold and silver. Visit us in River Oaks or the Heights today!!