Tue, Jul 26, 2011
The gold savehaven
Barisheff says that he has seen a clear connection between international financial crises and the accelerating increase in price of gold, far beyond its uses in jewellery and technology.
“For jewellery, the higher the price goes, the lower the demand is so the two don’t go hand in hand, but from an investment point of view, all that gold is doing is reacting to the debasing of currencies around the world,” says Barisheff. “You’re not really seeing the gold price going up on its own, it’s really currencies that are losing value and have been for decades. So whenever you see the price of gold rising, it’s kind of like a non-confidence vote in the fiscal management of the currencies and the economy.”
According to the World Gold Council’s report for the first quarter of 2011, over all investment in gold grew by 26 percent year-on-year from 2010, which is largely attributed to the 62 percent increase in demand for gold bars.
“If you’re just day trading it probably doesn’t matter so much, but if you’re trying to preserve your wealth you’ll want to get into an asset class like gold that is outside of the financial system,” said Barisheff. “You want an asset class that doesn’t have any counterparty risk and isn’t dependent on anybody. You don’t want another piece of paper called gold, you want gold.”
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