Find Cheap Online Discount Brokers

Is Gold A Safe Haven Even At $1,000 Per Ounce?

Is Investing in Dollar a smart decision? There is a lot of speculation that the dominant currency of the 20th century, the American Dollar, is doomed. As its value falls when compared with stronger currencies like the Yuan and Euro, many investors are looking for a safer investment than the dollar. One such investment seems to be gold. Even at $1,000 an ounce, it seems gold is the investment of choice for investors who want to play it safe.

The Declining View of the American Dollar

In the heyday of the dollar in the 20th century, you could take American money anywhere in the world and gladly meet someone who would change currencies. For investors, the dollar was a safe bet as an investment because it always seemed to gain value over the other currencies of the world. The dollar in short, was the currency of choice for the world‘s investment markets. However, things have changed recently.

For the past 60 years, governments of the world measured how strong their economies were based on how many dollars were in their central-bank. Everything from oil to coffee beans was denominated in dollars. The dollar was the medium of exchange around the world because it was backed by the largest economy on the planet; The United States of America.

Things have changed though. In 2008, early in the year, the dollar‘s weakening value was the main factor in the rising cost of energy, commodities and food. Investing in the dollar has also gone down. Many prominent economists also feel that there is a good chance of an abrupt fall in the dollar. In 2009, a comment by the U.S. Treasury Secretary Tim Geithnr, where he stated he was open to changing the international currency from the dollar, sent the dollar falling 1.3 percent in value in only ten minutes.

While a change in the top currency for the planet, from the dollar is not likely, that doesn‘t mean the dollar isn‘t losing money. From 2005 to 2008, the number of global currency reserves held in dollars fell from 67 to 64 percent.

World leaders and economists all agree that the dollar is going to continue to deteriorate in value as other nations like China and India begin to gain more wealth and more economic influence around the world. The U.S. will see its once strong economy losing preeminence and the dollar will lose its position as the world currency. Some economists believe that the dollar will fall from the top within the next 15 years, while the Euro is the most likely to take its place. The dollar is no longer a safe haven for investing, so what is?

Gold: The Way to Go?

On Sept. 8, 2009, the dollar hit its low for the year, while something else passed $1,000 an ounce in value. That something was gold, and gold has become a barometer for the strength of the dollar. On that day, the dollar fell in value to 77.10, when compared with a compilation of the six major world currencies that were the Yen, Euro, Franc, Krona, Canadian Dollar and the British Pound. Gold on the other hand shot past $1,000. The reason for this is that gold is used as a hedge against inflation and a weak dollar. Put simply, the lower the dollar goes, the higher gold goes.

In 1980, gold was valued at $850 per ounce. During the 1980s, inflation was a major concern for the world�s markets, but since many investors saw inflation as something that never go away; they did not hedge in gold. As a result, gold fell in value from 1980 to 2001. In 1999, it reached bottom but after 2001, something amazing happened. Gold began to rebound as the worlds markets suffered due to the collapse of the tech stock bubble. While many gold investors thought that gold would stop rising, it didn‘t. The dollar continued to fall and gold continued to, and continues to rise. This shows gold investors two things. The first is that there is a fear of a rise in inflation as investors see the value of the dollar fall, and two, there is a great fear over the devaluing of the American dollar. The American dollar is falling in value, the markets are in turmoil and the one safe haven you can count on seems to be gold.

The dollar has been falling in value for years, and as the UN pushes to replace it as the world‘s currency, it is expected the dollar will continue to fall, along with Americas economic influence. With China, the European Union and India becoming the economic powers of the 21st century, there seems nowhere for the dollar to go but down. While the dollar goes down, its counterpart in all things it seems, gold, goes up. It can be expected that gold will continue to rise above $1,000 an ounce and serve as a safe haven for investors who want to get out of currency investing in the dollar, and choose gold investing instead.

Please visit The Rise and fall of the American Dream to read about Status of American Dream

Please visit Gold Will Always Matter in the Investment Exercise to learn about reasons for investing in Gold

Please visit Brokers for day trading to find the listing of cheap brokers firms