Im not going to predict a speedy recovery for gold prices. That said, I continue to believe that gold offers investors safety in an uncertain world and, while I remain optimistic about the recovery of the U.S. economy and stellar financial performance of some companies, there is reason for concern on a global level. Thats why I think every investormust own gold.

So writes Ian Wyatt (www.wyattresearch.com) in edited excerpts from his original article* entitled Four Reasons Im Buying Gold Today.

[The following article is presented by  Lorimer Wilson. editor of www.FinancialArticleSummariesToday.com and www.munKNEE.com

Wyatt goes on to say in further edited excerpts:

Below are 4 specific reasons why I think gold continues to matterand why the recent decline offers a real opportunity to add exposure:

Reason 1: The Cyprus Effect

Cyprus, one of the smallest countries in the euro zone and heavily indebted, sent shockwaves around the globe when it announced plans to impose taxes on all bank deposits as a condition of its financial bailout, courtesy of the International Monetary Fund and European Union. Cypriot parliament promptly voted the measure down but then they enacted a similar tax on high net-worth account holders, taxing anything over 100,000 Euros at 30%

Cyprus tax on bank deposits sent one clear message to the rest of the world: your money isnt safe. If taxing code for stealing, in this case bank deposits was the solution for rescuing one financially insolvent country, whats to prevent it from being the model for future sovereign bailouts?

Next time it might not be a nation that accounts for just 0.2% of the European Union GDP.  It could be Italy or Spain or Greece. All of these countries are in terrible financial shape, and could find themselves in a similar situation to Cyprus. If so, the effect on the global economy could be disastrous.

If governments can suddenly steal bank deposits as part of a bailout agreement, then your money may not be worth what you thought it was. By nature, the currency becomes devalued as the euro did in the days after Cyprus radical bailout plan became public.

If you cant trust paper money, the International Monetary Fund, or your bank, where can you turn? For many people, the answer is hard assets and gold is one hard asset that has stood the test of time.

Reason 2: Unstable Currencies

Currencies have risen and fallen over the years. Through it all, gold has remained a valuable commodity.

People have been stockpiling gold for centuries. In these uncertain economic times, the precious metal still has tremendous value. As currencies have become devalued in recent years, the price of gold has steadily risen.

Gold Rises as U.S. Dollar Loses Value

Gold is represented in gold, the U.S. dollar is represented in green.

The chart above shows that the U.S. dollar tends to move inversely to the price of gold. Right now the dollar is on an upswing, advancing roughly 12% since late 2011. Meanwhile, gold has plummeted, sinking more than 22%. With countries from the U.S. to Europe to Japan pumping money into their economies, however, currencies including the dollar will eventually begin to lose some of their value again. When that happens as weve seen for 12 years now investors will seek safety in the form of gold and, right now, gold is the cheapest its been in more than two years. With stocks at all-time highs and the dollar hovering near a two-year peak, the yellow metal holds plenty of appeal.

Automatically receive our easy-to-read articles as they get posted!