All That Glitters

Spot gold prices were driven lower Thursday afternoon.

Many times it has been said that gold is a precious hedge against inflation. It has been reported that the price of gold eased a bit Thursday on the world market. The gold spot price inched down to $1243.65 as investors preferred stocks over the glowing metal. Hmmmm... to me, that signals it's time to BUY gold! There have been several past instances where gold prices dipped slightly just prior to a major upward move.

Let's examine the bigger picture here: According to, Newmont Mining ( NEM - news - people ) reported a 34 percent year-over-year increase in sales. Goldcorp ( GG - news - people ) increased net income in the second quarter of 2010 by 457 percent compared to the previous year’s second quarter. Kinross Gold ( KGC - news - people ) showed 25 percent growth in earnings per share. Boosted by a banner season for earnings, gold producer share prices surged 11.6 percent in August as measured by the Market Vectors Gold Miners ETF ( GDX - news - people ).
A total of 165,000 tonnes of gold have been mined in human history, as of 2009. This is roughly equivalent to 5.3 billion troy ounces or, in terms of volume, about 8,500 cubic meters, or a 20.4m cube.
Forbes continues: The good news for gold investors is that a rising gold price has offset the trend towards higher operating costs, allowing gold miners to expand margins. The price of gold averaged $909 an ounce for the first quarter of 2009, compared to $1,108 an ounce in the first quarter of 2010, a rise in price of $199 or 22 percent. The math of increasing profits is pretty simple. If average cash costs are rising by $90 an ounce and receipts are rising by $199 an ounce, margins are expanding.

My advice: if ever you've thought of buying gold, NOW is the time to do so! Do the research for yourself and I think you will agree that this commodity will only increase in value over the long run of time!

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