Finally, the price of gold can easily run up (or down), considering its small market supply, relative to other investment categories.
One Ounce, Please
Earlier this year, gold struck a high of $1,030 per ounce. It has since scaled back a bit to around $915 per ounce (recently), but the price is currently rallying and many experts are forecasting another solid incline in the next six months of up to 20%, due primarily to supply and demand.
"We're predicting gold at $1,150 per ounce by the end of the year," says David Beahm, Vice President of and Director of Marketing and Economic Research for Blanchard and Company, a leading gold retailer. The Gold American Eagle Coin, specifically, is the most widely traded gold bullion coin, says Beahm. Year-to-date, Blanchard has sold just as many gold coins as it did in all of 2007. The Gold American Eagle Coin is also guaranteed by the U.S. government by weight, content and purity. There is a bit of a mark-up from the "spot price" of gold, mainly so the dealer can cover its costs.
How to Trade Your Gold
As a general rule of thumb, investors ought to keep their exposure to gold limited -- around five percent of a diversified portfolio -- since the price can be highly volatile, just as the market conditions which drive the price of oil can be uncertain.
Don't have a thousand dollars for a gold coin? No worries. Investors can buy the Gold American Eagle Coin in a fraction as small as one tenth (1/10) of an ounce, which would cost around $100.
