Gold as an Investment

Many are joining the bandwagon of gold investment. Many are fearing the arrival of the day before doomsday.

There are many reasons given for the price of gold to continue to rise. One reason makes use of fear factor, that gold is the only universally accepted currency known over the past 500years (not paper money). And for this reason, people will buy gold to hedge against the day before doomsday. And when people buy, price will go up.

The problem is: If and when gold replaced paper money as the only acceptable currency, that would mean that the financial market is frozen and normal daily lives are no longer normal. There would be chaos everywhere and the next thing to worry about is the ability to survive, not wealth or wealth accumulation. And when that day comes, owning gold contracts or shares of gold mine may not help at all. Like paper money, these would not be recognized. Gold will only be useful if one owns them physically. i.e. the only hedge against "doomsday" is to keep some gold, most probably in the form of jewelry. And I believe that's the reason why yellow gold is still a traditional gift for chinese weddings.

Somehow, there is a confusion between fear and greed. Investment and insurance.