In these uncertain financial times, investing in gold has been a very popular topic of discussion. Whether you are considering a purchase of physical bullion or coins, buying an ETF (Exchange Traded Fund) or investing in the stock of a gold mining company, it is important that you know the positive and negative aspects of an investment in gold.

Lately, “Gold Bugs” have been creeping out of the woodwork, appearing on TV commercials and urging you to invest in gold. Perhaps you have received an impressive mailing from a company that sells gold. Warnings to act now and buy gold and don’t hesitate because you might miss the big move are standard fare. Maybe what they say is true. Maybe they are simply opportunists, hoping to get you to part with some of your hard earned money.

What should the average investor do? Is gold a good investment for anyone? Well gold, like any other investment has its good and bad points. It is up to the individual to learn as much as he can before deciding whether or not to invest.

Is gold a good investment for you? Investments of any type are not black and white. What might be a good investment for your neighbor may not be right for you. In general you must ask yourself about your tolerance for risk, your investment time horizon and the return you are seeking. So with that in mind, let’s consider both the positive and negative points about investing in gold.

Why Should You Invest In Gold?
. Gold is ready for a major run toward $2,000 an ounce.
. Today’s Economic Conditions make it an ideal time to accumulate gold.
. World Turmoil makes gold a good investment
. A Hedge against inflation
. A weak dollar is positive for gold

According to the bullish gold experts, gold is ready to make a major run toward $2,000 an ounce. Having gone up more than $200 in the last year or so, there is widespread belief that it will continue to rise at a steady pace. Technicians will point to their charts and espouse all the indicators that lead to a perfect upward path toward $2,000. Fundamental analysis is also quite convincing. China and India have been major buyers of the commodity. With the increasing wealth of these countries, all indications point to a continued interest in gold. In the United States, each year, the US Mint produces a certain amount of gold coins for investors and collectors. The number of coins produced is based on an estimate of the demand for these coins. In 2009, the American Eagle one ounce gold coin quickly sold out. If you want a 2010 gold coin, you better hurry or you’ll be out of luck. The limited supply has caused a rise in price for the retail purchase of gold. Because there is a demonstrated increase in demand and the supply has not kept up, it is inevitable that the price must trend up.
The basic economic law of supply and demand will push the price of gold higher for years to come.

Today’s Economic Conditions have created a perfect environment for the price of gold to appreciate. The crisis in the banking industry is far from over. Goldman Sachs is under government investigation. Foreclosures are still happening at a far too high rate. Unemployment is still hovering around 10%. The everyday man or woman has not stopped worrying about the safety of their investments in the stock market. As the level of fear and anxiety continues to infect so many investors, gold seems like a reasonably safe alternative. People who were burned by the collapse in the market are not willing to be burned again. It is this change in attitude that will bring a whole new group of investors into the gold market.

World Events are always a consideration when investing. The more disruption and uncertainty there is in the world, the less the stock market likes it. Gold is the beneficiary of troubled times as investors seek the comfort of a fixed asset that has historically held up very well under duress. With the United States fighting wars in Iraq and Afghanistan, there is little wonder that markets are affected. How long will we remain fighting? What are the political ramifications of the eventual outcome of these wars? Terrorist attacks are a too real possibility. We can never be certain we won’t be attacked. An attack on our power grid could have devastating economic consequences. Dealing with many other major problems in the world can be troubling. Energy supply might be threatened. World hunger, shortage of water and poor healthcare have led to unrest. Can we manage all of these crisis situations or will they ultimately lead to a less viable world economy? Gold is king when the world is out of control.

Today, Inflation is hardly a problem. Interest rates are near zero and prices have risen only modestly. But, this environment will not last forever. The incredible amount of our national debt will inevitably lead to inflation. The immense amount of government spending on bailouts and other programs designed to stimulate the economy, has to eventually be paid back. As debts come due, dollars will be printed and inflation will result. How soon and how severe prices will rise is still to be determined. This economic cycle is certain. Gold will benefit greatly as a hedge against inflation.

The Weak Dollar, a result of economic policy, has a great effect on the price of gold. The Federal Reserve and Mr. Bernanke have chosen a path for our economic recovery that encouraged a weak dollar. Aside from the ever-expanding trade deficit, the debt load and several other factors have caused the dollar to plummet against many of the world’s currencies. I remember a few years back when the Canadian tourists would come down to Hollywood, FL and try to pay for their purchases with Canadian Dollars. Most Merchants would not accept Canadian money because it was only worth about .80 to the US Dollar. It is disappointing to now find the US Dollar being worth less than the Canadian Dollar. Well, as disappointing as it is to see the weakness of US currency, gold benefits from this weakness. Holding gold is a good strategy in the world economy when the dollar is weak.

Why Should You Not Invest In Gold?
. Opportunity Cost
. Storage problems of taking possession of physical product
. Belief that gold prices have peaked and are heading down.

Owning Gold means that the dollars you spent buying gold can not be applied to other investments. While stocks can run up rapidly, gold tends to climb in a more deliberate manner. It may take a year or more for gold to appreciate 10%, while a hot stock can easily make you 50% or more on your investment. If you are very active in the stock market, you may find yourself “cashing in” your gold coins that have not moved in months for a position in a can’t miss stock.

Storage Problems when taking possession of physical gold can be a reason why you would not want to invest in gold. While this problem can be solved by having the institution where you buy your gold actually keep possession in their vault, many people want to be able to touch their gold. People who believe that doomsday is coming inherently have a distrust of institutions and would wonder if their gold was safe. As irrational as it seems, many investors will hoard a substantial collection of gold coins in their dresser drawer, making them targets for a costly robbery.

Certainly, the best reason for not owning gold is if you believe that the price has peaked and the trend will be downward. In what can be described as a somewhat bullish gold market, there are still many contrarian investors who believe gold is not a good investment. They too have charts to read and can come up with a number of scenarios as to why gold will go down before it goes up. Basically, they are more optimistic about the world and the economic recovery. The wars in Afghanistan and Iraq will end soon and very positively for America. Osama Bin Laden and other terrorists are not a big threat to our country. The dollar will strengthen. Inflation will remain in check and the world will come together in peace and harmony. Of course this is a bit of an exaggeration, but, the point is, some people don’t think the world is coming to an end.

I would suggest that gold is a good investment as part of a well balanced portfolio. No one really can predict the future, so it is a good idea to have your money spread over a wide area of investments. Don’t put more than about 10% of your total investable dollars in gold. You will give yourself a chance to make a nice profit if gold rises as some predict and at the same time, you won’t be destroyed if gold prices move lower. Over time, I believe gold to be a good investment. If you can’t buy gold and wait a year, two years or even five years for it to move higher, stay away. Otherwise investing in gold is a good idea.

There appears to be a unsure carrying on over the preceding month between the powers proclaiming a nascent economic recuperation and those that believe there is still a longsighted road of economical contraction and expanding unemployment still ahead. Reality be told, gold is expected  to shine regardless however this finally runs down.

Gold bears  remarkable resilience over the past year, despite claims from some quarters that broad-based deflation was expected to weigh on all commodities including the resilient gold. We on the other hand have systematically maintained that the major economic forces in the world were just not going to let that befall.

Through monolithic fiscal stimulus package, close to  zero interest rates, bailouts and assorted liquidity strategies, the global economic system is awash in currency. This isn’t to say we are out of the woods as yet, simply if things take another turn for the worse, monetary authorities around the world will once more address whatever means are at their disposal to prevent a deflationary spiral.

For those countries with rates of interest at or near zero percent, there’s not much more they can do on that front. All the same, when it comes to printing money and funneling into the economic system, they really have no boundaries. But, there are consequences.

In the US and UK, the governments have turned to quantitative easing as a means to force back the effective borrowing rate lower still. In fact, a recent study by the Fed learned that an appropriate interest rate based on unemployment and inflation would be -5.0%. Other countries are thinking over similar unconventional policies.

Their goal is to produce an environment conducive to the antithesis of deflation, which naturally is inflation. Be assured, they’ll accomplish that goal.

Are the economies of the world bouncing along a bottom at this point, or is this merely a brief respite before the next round of awful news? Most traders will assure you that picking bottoms is a fool’s game. I agree, and I believe you can employ that same thinking whether your talking individual stocks, commodities, gold or macro-economic trends.

Physical gold is going to continue a critical factor in the modern portfolio in either case. If the global economy does carry on to contract with even higher unemployment rates still to be seen — and all the damaging implications of that — gold will proceed to serve as significant diversification versus the more traditional asset classes that would suffer under this scenario.

This scenario also puts the banking industry under considerable extra pressure, maybe even beyond the worse case scenarios of the much discussed bank stress-tests. Gold provides protection against the possible reemergence of broad-based systemic risks.

On the other hand, if the economy is indeed on the mend — as the stock market seems so desperate to prove — gold will once again reestablish itself as the classic hedge against inflation.

We’ve seen inklings of that this week when both stocks and gold have rallied in tandem. Suggestions of recovery, be they false or not, are going to bring the specter of inflation back into the investor’s awareness.

Upon recuperation, whether it’s happening at once or whether it does not happen until the following year as most economic experts believe, there is simply no way for all the liquidity to be drained out of the system quickly enough to prevent substantial inflation. Of course the government will not risk constraining monetary policy too soon, raising the risk of hyperinflation as they wait to be sure a recovery is afoot.

The funds may already be trying to front run confirmation of higher inflation, building positions in gold under the assumption that their risk is restricted even if they are ultimately proven wrong. Gold will then be supported by resurgences in risks to growth and systemic risks.

Not a bad scheme, with gold still well over a $100 off the all-time highs. By the time we see that first big jump in CPI or if some other big risk event — and there are enough out there — turns things the other way, gold may have to be purchased at much higher levels.

For serious investors looking to purchase gold bullion, coins often yield higher returns than gold bars. The main reason is that gold bullion coins carry intrinsic value beyond their carat weight and gold content. Gold bullion coins are also valued for their age, mintage, condition, design and country of origin.

Current gold bullion coins on the market today include the:

* American Buffalo
* American Eagle
* Canadian Maple Leaf and
* Austrian Philharmonic

American Buffalo

The U.S. Mint first introduced the American Buffalo gold bullion coin to the investment market back in 2006. These collectible coins, based on the original 1913 Type I Buffalo nickel, marked the beginning of .9999 fine gold bullion coins as issued by our nation’s government.

The front side of the coin depicts a Native American from his profile, while the back features an American Buffalo shown grazing. The gold bullion coins weigh one troy ounce and mintage by year is as follows:

* 2006 – 300,000+
* 2007 – 200,000
* 2008 – Limit based on demand

American Eagle

The United States Mint first introduced the American Eagle gold bullion coins in 1986. These magnificent gold coins symbolize the liberty and freedom we have shared as a country for over two centuries.

Each American Eagle gold coin exhibits the time-honored patriotic symbols of Lady Liberty holding her freedom torch and an olive branch denoting peace. While the coins reverse side presents a male bald eagle carrying an olive branch to his female companion and her nest of babies.

All American Eagle gold bullion coins are backed by the United States Mint and come in the following sizes and values:

1. One-Ounce in $50.00 USD
2. Half-Ounce in $25.00 USD
3. Quarter-Ounce in $10.00 USD
4. Tenth-Ounce in $5.00 USD

Unlike the American Buffalo, the American Eagle gold bullion coins are 22KT (or .9167 fine) gold with a silver and copper alloy to help improve their endurance under typical handling. Every coin is guaranteed by the United States Mint to contain this precise measurement in gold.

Canadian Maple Leaf

The Canadian Maple Leaf gold bullion coins are world-recognized and esteemed for their purity and ornate design. Struck by the Royal Canadian Mint, the Maple Leaf has been in production for more consecutive years than any other gold bullion coin to date.

The Royal Canadian Mint is highly regarded for its flawless measures, and the Maple Leaf gold bullion coin is certainly no exception to their quality upheld. The Mint’s requirements for impeccable planchets, from which the coins are struck, has spawned high interest and demand among investors and collectors alike.

The front side of the coin depicts Great Britain’s beloved Queen Elizabeth II, while the backside features the Canadian national symbol of the maple leaf from which the coin derives its name.

The Canadian Maple Leaf gold bullion coin is produced in four sizes and denominations including:

1. One-Ounce in $50 Canadian
2. Half-Ounce in $20 Canadian
3. Quarter-Ounce in $10 Canadian and
4. Tenth-Ounce in $5 Canadian

Vienna Philharmonics

The Vienna Philharmonics gold bullion coin is internationally-recognized for its magnificence and solid gold content. Produced by the Austrian Mint in Vienna, Austria, the Philharmonic gold coin is minted by one of the oldest and most prestigious minting manufacturers in existence.

In 1989, the Philharmonic gold coin was first struck and denominated in Australian Shillings. That is, until 2002, when the coins were changed over to Euros, making it one of the few gold coins to have been minted and circulated in alternate currencies.

On the front side of the coin, one denotes the “Great Organ,” as from the Vienna Philharmonic performance hall. While, the backside exhibits a plethora of instruments and the ochrestra’s name inscribed in German.

The Vienna Philharmonics gold bullion coin is struck in four incremental sizes and values including:

1. One-Ounce in 100 Euros
2. Half-Ounce in 50 Euros
3. Quarter-Ounce in 25 Euros and
4. Tenth-Ounce in 10 Euros

In troubling times with weak economies, buying gold bullion is an optimal method for preserving your wealth and purchasing power. Gold bullion can be easily bought and sold around the World, so it is a highly liquid asset. This can provide an investor with the flexibility to trade gold bullion for various currencies in times of need.

As with any traded commodity, demand is the driving factor for increasing prices. Over the last four years, gold bullion has risen by more than 300%! Imagine if you had only purchased a few ounces back in 2004. However, gold has made a continuing rise due to a ever-weakening World economy. Thus, its upward trend may only persist in the years to come.

It is true that we currently live in times of uncertainty. Thus, wise investors are buying gold bullion to hedge against unforeseen disasters. Though no one investment is safe without diversity, adding gold bullion to your portfolio can help stave off bankruptcy.