Gold and the Economy

How Gold Affects You

How Gold Affects the Economy and You

Gold coins
Gold retains its lustre as a safe haven during times of crisis. Photo: Getty Images

Gold's impact on the economy waxes and wanes, depending on how safe other investments are. In fact, you can tell how healthy the economy is from the price of gold. When the U.S was on the gold standard, the precious metal had an even great importance. Find out whether gold is a good investment, where to buy gold, and when is a good time to buy gold.

Gold Price History

Gold prices are now determined by commodities traders. Photo: David McNew/Getty Images

Gold was first used for money in 643 BC. In 30 BC, the Roman Emperor Augustus set the price of gold at 45 coins to the pound. It's value has steadily increased since then, reaching a peak of $1,823 an ounce in 2011. See for yourself the history of the price of gold, and why it will again fall below $1,000/ounce. More

Gold Prices and the U.S. Economy

When other investments look too risky, gold always looks like a good hedge. Find out the recent history of gold prices, and what fluctuations in the price of gold tells you about the health of the U.S. economy. More

Gold, "The Ultimate Bubble," Has Burst

The gold bubble burst in 2011. Photo: George Peters/Getty Images

Was commodities trader George Soros right when he said "Gold is the ultimate bubble"? Soros argued that gold, unlike housing, company stocks, or even oil, more easily lent itself to speculation because it has very little intrinsic value. Does that mean high prices in 2011 were just a sign of an asset bubble? Here's why gold prices  will fall below $1,000 an ounce again. More

3 Reasons to Invest in Gold

gold ingots
Gold is water-cooled after it is pressed into ingots. Credit: Matilde Gattoni

People invest in gold to offset stock market declines, hedge against inflation and counteract a declining dollar.That is why gold is often considered a safe haven investment. But is it really? Research from Trinity College shows that gold should be included in a well-diversified portfolio. It does protect your investments as a hedge after a stock market crash. However, this protection is short-lived. Is it worth holding gold for that reason? How much gold is enough? Does it make sense to buy gold when the price is going up? Find out what the research says, and how you can use gold to improve your financial return. More

What You Should Know Before Buying Gold

When the price of gold shoots up, everyone wonders if they should buy it. Are you a good candidate for buying gold? Learn what kind of investor is most likely to profit from buying gold. Find out why, the higher the price, the riskier this commodity is. Understand at what point a gold bubble will become a gold bust. More

History of Gold

Gold medallion, minted for Caesar Augustus to commemorate Sextus Pompey victory, verso, Roman coins, 1st century BC. Photo: De Agostini / L. Romano
Before gold was used as coinage, its value was recognized. Gold jewelry is buried in the Tomb of Djer, king of the First Egyptian Dynasty. Gold's beauty, lustre and malleability made it perfect for many uses. In fact, the Egyptians became masters at the art of beating gold into leaf. Find out how gold was used throughout history.

What Is the Gold Standard?

When a dollar could be redeemed by actual gold. Photo: Tetra Images/Getty Images

The gold standard is how countries tie the value of their currency to gold. Basically, they are willing to redeem that currency for its value in gold. This allowed lightweight paper currency to be used for trade, instead of heavy gold bullion. In addition to making purses, and pockets, lighter, the gold standard allowed global trade. Find out how this worked, and why a return to the gold standard would adversely affect the US economy.

During the financial crisis in 2008, many longed for a return to the gold standard. It seemed that money had lost all relation to anything concrete. However, the very forces that pried us away from the gold standard also meant that a return would prompt massive deflation that would probably throw the global economy back into another depression. More

History of the Gold Standard

history of the gold standard
The gold standard meant money could be redeemed in gold. Photo: ncognet0/Getty Images

Gold was first used as a standard in 643 B.C., when the metal was used to create coins. Wealth was defined strictly by the amount of gold you had. Find out how the use of gold as money evolved, from coins, to paper redeemable by coins, to a concept that was only loosely tied to its value in gold. Follow the gold standard's evolution, through its impact on the Great Depression, how it was modified after World War II, and to its eventual dissolution in the 1970s. More

Why So Many People Want to Return to the Gold Standard

Rand Paul and Ron Paul
U.S. Sen. Rand Paul (R-KY) (L) talks to his father Rep. Ron Paul (R-TX) (R) during a news conference June 22, 2011 on Capitol Hill in Washington, DC. Photo by Alex Wong/Getty Images

Like many others, former Representative Ron Paul argued for a return to the gold standard, and using gold and silver as the basis of money. If Dr. Paul had been elected President, this would have been one of his first actions. His goal was to force the government to cut spending, lower the budget deficit and debt, and restore fiscal responsibility.  More