October 14, 2009 - Gold bullion prices were repressed earlier today as the Dow Jones Industrial Average(DJIA) surpassed 10,000, but many blue-chip economists fear that US stock indexes will pull back dramatically leading up to the holiday season. These economists feel that the stock rally has been vastly overdone during the last three months, and they expect that many investors will opt to liquidate their holdings. Companies have eliminated massive amounts of their operating costs to placate shareholders who demand profits, but their budgets can only be trimmed so much. "The companies are cutting fat, and in many cases cutting bone and muscle. There's no organic economic growth there," said Rich Yamarone, economic director for Argus Research.

Another key reason that the DJIA has performed so well is because some of its failing members were replaced by more successful companies. General Motors and Citigroup were removed from the DJIA months ago, and were replaced with stronger companies such as Cisco. "You take out the worst, put in the best, and by definition you'll get better numbers," Yamarone said. Some investors believe that their stocks could climb slightly higher, so instead of liquidating those assets they simply diversify them. Many of today's investors have diversified into commodoties like gold, silver, oil, wheat, and other natural resources. Many investors prefer to invest in gold bullion because it is an affordable way to own physical gold. These investors use gold bullion as a short-term hedge against inflation, and precious metals have historically been valued as safe-haven assets during recessionary periods. Investors also value the liquidity of gold and silver bullion and certified coins, because other commodities are far less practical to liquidate if physical delivery is taken. A barrel of oil or a ton of sugar require time and resources to sell, but precious metals can easily be liquidated to cash by contacting a reputable gold exchange that has a zero complaint, A+ rating with the Better Business Bureau. These ratings are available to household investors at www.BBB.org, and all individuals are encouraged to research any potential gold dealer before opening a gold account. 

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Jonathan Monroe

Senior Staff Writer - Gold-Bullion.org