Eight reasons for Investing in Gold

A former broker and trading supervisor at Charles Schwab has today (April 9th) outlined eight reasons why Buying Gold is an attractive proposition for investors.

Tony Daltorio, who spent 20 years with the firm and is now an independent analyst, has highlighted the metal's ability to hold its value and serve as a hedge against inflation.

He notes that it moves in the opposite direction to the dollar, which is currently at risk of devaluation as a result of "large budgets, trade deficits and an increase in the money supply".

In an interview with Seeking Alpha, Mr. Daltorio also outlines concerns over gold supplies, commenting: "The selling of Gold Bullion from global central banks has slowed and production of new gold from mines has also been diminishing.

"A basic economic rule of supply and demand would show that reduced supply should result in increased prices."

Indeed, he states that investment demand in emerging countries such as India and China is growing, while noting that global uncertainty and low confidence in governments at present are helping the yellow metal.

Mr. Daltorio also explains that gold's purchasing power picks up in periods of deflation and that it provides investors with an attractive portfolio diversifier, balancing the risk associated with stocks and bonds.

One of his points was picked up on last week by Sandra Conway from London-based bullion dealer ATS Bullion, who explained that people have been buying gold ever since the collapse of Lehman Brothers last September.

"People want something tangible in their hands as a safeguard," she told the Economist.

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