Gold at $1100 an ounce is still cheap…

The title of this post reflects the view of respected commodities commentator, Marc Faber. His views recently reported suggest that at $1100 an ounce gold is actually cheaper than it was when it was $300 an ounce in the past.

“Faber explained that gold price should be treated in the same way that a company’s stock is being treated by investors. “A company’s stock could be less expensive at $100 than when it was selling for $10, because earnings growth has outpaced the appreciation of the shares and therefore its P/E has declined, gold could be cheaper at the current price than when it was at less than $300 because of the explosion of foreign exchange reserves in the world, zero interest rates, the huge debt overhang, and the expectation of further money printing,” he said.”

Another factor to take into account is who will be buying the precious metal over the coming year. Analysts are looking to China as a potential purchaser given the country’s nervousness about the US$.

Now, debate about the price of gold is like any investment field, there are always as many bullish views as their are bearish and so you should exercise caution when trying to make a decision for yourself. Personally the bullish argument is stronger in my opinion and that is why I have bought physical gold from Bullion Vault.

This is an extremely efficient way to buy this particular commodity as they are able to offer good prices and low dealing costs. In fact, they are also now dealing in silver bullion as they see this as a growth area for the future.

With predictions for gold ranging from $1500 all the way up to $5000 an ounce there is still plenty of scope for profit and you should consider including the metal as part of your portfolio. We may still see pullbacks in the short term but hopefully the future will see good rises.

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