Oil and gold are two of the most prominent commodities -- both as visible goods in everyday life and as investments. One other thing they have in common is that both took a bit of a hit from the federal government shutdown. Does that step back in prices make them an attractive investment now?
Here are some points to consider:
By mid-October, gold prices had fallen nearly $500 an ounce over the past year, to just above $1,250. Like many assets, they got a quick boost from the budget deal, but they remain sharply off their highs. Does that make them a bargain?
Even at today's reduced levels, gold prices have roughly tripled in the past 10 years. That long, speculative surge may have finally broken, and when that happens, investments in gold can represent dead money for a long time.Because gold can be subject to very long price cycles and does not provide you with any sort of ongoing income, it is not the kind of investment that should be a central part of a portfolio, but it can be used to incrementally add diversification. However, if it is diversification you are after, you may want to invest in a wider range of commodities rather than gold alone.