Gold has been used as a form of currency for over 6,500 years. In recent events gold prices have increased dramatically, mostly due to the the economic crisis of 2008. The price for an ounce of gold has doubled in the past four years. In July of 2007 the price for one ounce was around $700, today gold prices closed at $1,523 per ounce. Analysts are predicting that demand will continue to increase causing prices to rise to $2000 per ounce by the end of the year. Many people invest in gold when the future of the economy is uncertain. Gold offers protection that the dollar cannot, if the economy were to collapse, the dollar would be about as useful as toilet paper while gold could be used to trade for necessary resources.
“The current fears of 2012 disaster scenarios are not the only time gold has risen in price. Historically gold has gone up in times of great economic uncertainly, notably during the Great Depression, and more recently with Y2K fears a dozen years ago.”(Suciu) With fears of the apocalypse coming on December 21st 2012, now could be the perfect time for investors to buy. If prices rise to $2000 before 2012, investors can experience a 33% increase in asset value from current prices. As we approach December 2012, media will spread news of the Mayan prediction causing citizens to fear the possibilities of an apocalypse. Those who believe, or even fear its possibility, will begin to hoard all the gold they can get. This hoarding will greatly diminish the supply of gold, and as we know, once the supply curve shifts left, the demand curve and prices rise. The investor, who purchased their gold with the intent to sell, is now faced with the issue of when to sell in order to maximize profits.
Without a doubt, the gold investment should be sold before December 21st, 2012. Why? When everyone wakes up on December 22nd and realizes that the sun did indeed rise, they will be eager to sell their excess gold. This will cause the supply of gold to shift to the right and prices per ounce will plummet. Even if you believe the world is ending, you should still sell your gold and you can use the profits you made to buy things that may matter during an apocalypse such as extra food, water, and survival gear. If you don’t believe, you will most likely get a good laugh when you wake up on the 22nd knowing you just made bank.
Work Cited
Suciu, Peter. "Apocalypse 2012 — Special Report — What It Is And How People Are Profiting From It - CNBC." Stock Market News, Business News, Financial, Earnings, World Market News and Information - CNBC. N.p., n.d. Web. 23 June 2011. <http://www.cnbc.com/id/42253645>.
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