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Does Investing in Gold Top Your List of "Best Investments"?

Even though the Dow Jones Industrial Average and Standard & Poor's 500 Index have hit record highs this year, investing in gold remains the top investment pick in CNBC's latest All-America Economic Survey.

The March poll shows the yellow metal is the favored investment choice among 35% of respondents, beating real estate at 27% and stocks at 21%. This is the second year that investing in gold has topped the list of what those surveyed consider the "best investment" to make now.

While survey participants are more optimistic this year than last about the stock market, 21% are uncertain if now is a good time to dabble in stocks, up from 11% in December 2009.

Those who believe the current environment make it a good time to buy stocks jumped from 31% in November to 40%, the highest amount since December 2009.

Moreover, in spite of the improved outlook for stocks, the overall view of the current state of the economy remains bleak. Currently, 60% of those surveyed are pessimistic about the U.S. economy, up from 56% in November.

Why Investing in Gold Tops the List

Sequestration, quantitative easing and inflation are the basis for the glum economic outlook. Those factors also explain the glowing attraction to investing in gold.

Gold was once simply a safe haven investment. The precious metal provides a hedge against inflation. Many who are investing in gold maintain the position purely as a means to diversify a portfolio.

But gold has grown increasingly more attractive over the years for different reasons.

The yellow metal is good "insurance" against devalued currencies, and loose monetary policies and stimulus measures the world over have made paper money less valuable. As a result, investors and central banks have loaded up with gold.

Ongoing concerns over the ballooning federal budget deficit and national debt in the U.S. also have boosted gold prices. Concerns that global investors will lose faith in the U.S. government's ability to control its debt stand to make gold more valuable relative to the dollar.

Another reason to have faith in investing in gold: continued gold-buying activity of global central banks.

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  1. Peter | April 3, 2013

    "insurance" against devalued currencies"
    Sorry that holds no water when the entire world is printing money and not just the USA
    You would think this would create inflation, but the opposite is true, if these printing presses stop we would see a deflation spiral.Gold has no relation to supply and demand, as most gold is traded with paper gold, and heavily manipulated by the banks. If you are in the boat that this entire system is coming down, then there is something that needs to be considered 1st.
    1) what will be more valuable a gold coin or a loaf of bread when you are starving. In the past people simply waited until you starved to death and then took your gold.
    2) If you follow the bible and go to church, you would understand that this is planed, to usher in a new one world currency. This new system will be based much like Star-teak, while you exchange credits to buy things, nothing physical will be traded. You wont be able to exchange your gold for credits so as it is written "gold or silver wont save you."
    3) If you are looking at it as an investment then as I stated above, how can you predict what will happen, that's the worst way to invest. I own some simply for that reason who can predict the future, its not an investment, that would be something you expect to go up in price.

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