Sunday, March 28, 2010

Is gold a bargain, or is it a bubble?

Rarely, if ever, have views on this ancient store of wealth been so mixed. Gold bugs note that at around $1,100 an ounce gold is, on an inflation-adjusted basis, trading at a mere half its all-time high from 1980. What’s more, they argue that the flood of dollars, yen and euros central banks are printing will spark inflation and debase major currencies--risks against which some believe gold provides a hedge.


Gold bears, by contrast, argue that yellow lumps of metal create no tangible wealth, generate no income for their owners and, over the long haul, have in the past gone decades without producing even an ounce of price gain. Owning gold, some say, is the slightly kooky investment equivalent of stocking your home with shotguns and canned goods to hedge against doomsday.
The following stories are aimed at offering perspective on the debate and guidance for those who think gold may provide a useful hedge, even if the end of the world is not around the corner.

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