Bargain-Hunting in Gold? - 3 September 2010

You're forgiven for being frustrated. Gold simply refuses to drop back...

THIS CHART has frustrated lots of bargain hunters in the gold market, writes Brian Hunt in Steve Sjuggerud's Daily Wealth. It shows the past year's trading in gold.

Gold is one of the world's most volatile assets. It is impossible to accurately value. You can't say "I'll pay 10 times earnings" for gold like you would with a stock. You can't say "I'll pay eight times annual rent" like you would with a property. Gold tends to trade on wild swings in investor fear.

That's why many seasoned investors expected gold to endure a substantial correction after its massive 2009 rally...or after its similar rally this year. They expected to add to their gold holdings well off the short-term high...at short-term bargain prices.

But as you can see from this chart, there's no gold bargains to be had this year. Gold is not suffering natural sell-offs after rallies. Instead, small price declines now trigger huge buying interest from Asia, the Middle East, and giant institutional investors...folks who want to diversify assets out of paper and into "real money".

For those people looking to buy gold, we here at Daily Wealth say don't worry much about the current price... just keep accumulating ounces.

Buy gold at your price, live online, using the ultra-secure, low-cost BullionVault service...