In recent months, the price of gold has dropped considerably, and where it goes from here is anybody’s guess. According to Bloomberg, gold futures inNew Yorkhave fallen 18% in the past three months. Consider, too, that in August, 2011, gold was priced at $1,888 an ounce, while today, as I write this blog, it’s at $1,462.50.
My point? Simply to state that the 12-year rally in gold may be over, although I will leave a more definitive assessment to the experts in the field. Nevertheless, as uncertainties about the world economy continue to fester, and as geopolitical risks continue to escalate, gold will continue to be an integral part of many investors’ portfolios. It’s certainly an alternative investment that today’s RIA may wish to discuss with his or her clients.
In the past few years, investments in gold have skyrocketed. Since the year 2000, the actual amount of new investment in gold has amounted to approximately $250 billion. For the first time, privately held investments in gold have surpassed government holdings. And investment demand in gold has exceeded jewelry demand for the first time since 1980.
Gold: Still Tough to Track
Whether the investor is holding physical gold or paper, the process of acquiring and compiling the data on gold investments (and all precious metals for that matter) has traditionally been a laborious, manual operation that hasn’t changed much in recent years. It seems that the data is quite literally or figuratively “locked in the vault,” which can make extricating it quite difficult.
That’s in contrast to much of the data flow on equities and other types of investments, which RIA firms have largely succeeded in automating and streamlining.