Gold has long been a popular investment choice in emerging and Essay

Gold has long been a popular investment choice in emerging and developed economies. While portfolios become more diversified, allocations to gold remain significant - Essay Example It will also consider its place in credit driven economies, and its significance in compensating flaws of the banking system. Using survey, first hand observation and expert research; this paper will show that gold retains its popularity as an investment tool, which compares favorably with bank savings products. As a credit controller at the National Commercial Bank of the Kingdom of Saudi Arabia, I observed many misinformed invertors putting money in inappropriate investment products. These observations prompted my consideration of allocation to commodities such as gold. In order to diversify my portfolio I invested in gold at 1286 USD/Oz on April 28, 2014, and I have observed a 26 dollar per ounce increase in price following news of the escalation of the Ukraine crisis, the US job report, the devaluation of the Yuan and an increase in gold imports from China. However on June 2, 2014 gold dropped to around 1234USD per ounce after a sever hedge fund selling. Gold was sold, to cover losses on bonds as result of the rising yields. Simultaneously people were selling gold to buy stocks as good economic data boosted the US stock market. By June 10, 2014 the price of gold rose again to around 1260 USD/Oz, following a decrease in the US stock market. From this we can clearly see that gold prices are influenced by contrasting economic and political forces. From the behaviors of investors under negative world economic events, it is very clear that gold has an effective hedge against these assets and, therefore, it can provide diversification benefits to inves tors. As investors start questioning equity under these negative economic events gold will still remain a popular option. The survey was conducted to further investigate; the different attitudes to investments in gold, type of preferred investments, expectations of the market, and allocation to investments. In the survey, the main target was on professional and retail investors. The