GOLD- the quintessential anticyclical asset.

In comparison to other commodities, there is no real correlation between returns on gold and changes in macroeconomic variables such as Gross Domestic Product, inflation and interest rates. Therefore, gold returns are less correlated with the returns on equity and bond indices than other commodities. As a result, gold as an investment asset fulfills two related fundamental functions: it is a safe haven in times of financial volatility and it is a risk minimization tool.

A historical analysis of gold prices compared to the world's equity markets reveals a clear inverse relationship between returns on equity markets and the gold price. Generally, as equity markets fall, gold prices rise. There is also a solid correlation between geopolitical and financial market instability and rising gold prices, as demonstrated in the lead-up to the Iraq war.

The current market is strong and there are some indicators that predict even a higher market. But like the stock and bond markets, there will be an adjustment. I wish I was a clairvoyant and had "coraggio" to jump in and out at the appropriate time!

GOLD. Really Gold? At Wholesale?

How many times have you heard "I can get the same gold chain in the L.A. Jewelry Mart for 40% less!" Or, "I can get it for you wholesale!"
For starters, many of the gold articles stated or stamped as being 18k or 14k are not! It is not uncommon to find these items at 20% to 40% less in gold content than they are purported to be. The FTC Guides require that the content must be within .003 of what it is supposed to be: 14k gold is .583 per cent of 24k. The tolerance is not allowed to be less than .580. The result of under-karating can be a dramatic change in price. A gold chain that is 14k and priced at $100, could be $60 if the gold content is 10K. If a merchant is caught doing so on just one or two occasions, they will get their "hand slapped" by the FTC and advised to discontinue this practice. Soon enough, they may be back doing the same thing again. So much for "bargains!"

With regard to "wholesale", the word means a sale for resale in which there is no sales tax, and has nothing to do with what the typical cost of being sold from a distributor to a retail establishment. You may be getting a discount, but it is unlikely that you are getting the price paid by a retailer, particularly if tax was added to the sale. If you don't have a resale license and you haven't paid the tax, there is something fishy going on!

PLATINUM OR WHITE GOLD?

Which white metal should you choose? They both offer superior beauty and value for your money, but what are their differences - and how do you know which is right for what you have in mind? Your decision should be based partly on how long and how often it will be worn, how much you want to spend and your personal taste.

Here are a few issues to consider:

COLOR- White gold is yellow gold alloyed (mixed) with nickel and zinc, which impart its white appearance. By contrast, platinum is pure white naturally. White gold can look slightly more yellow, however, in most cases, rhodium (platinum family) is plated over white gold, giving it a platinum appearance.

DURABILITY- Platinum is the most enduring of all precious metals. Even after years of daily wear, it shows little or no sign of age - whereas white gold may wear more quickly. Thus, platinum is sometimes used for prongs even when the remainder of the piece is made of white gold. However, 14-karat white gold is a high-quality option - and if it wears thin after years of wear, a jeweler can reinforce it with white gold.

PURITY- Most platinum used in jewelry is 90 to 95 percent pure. The remaining 5 to 10 percent is also a precious metal - usually iridium or ruthenium (for strengthening) - making platinum jewelry 100 percent precious metal. 14 karat white gold is approxmately 60 percent pure. Although the alloys used in it are not precious metals, it is an excellent metal for all types of jewelry.
VALUE- The value of precious metals varies, but generally you can expect platinum jewelry to cost significantly more than a comparable piece in white gold.
STYLE- Today both white gold and platinum are popular and fashionable in all types of jewelry. Platinum was the setting of choice for wedding rings during the early 1900s, and its popularity is soaring again.