"If you bet blindly for or against gold, it will lead to grief."
So says commodity markets expert Jeff Christian, in a stark warning to investors who would recklessly speculate in the bullion markets.
It's not that he's recommending refraining from betting. Rather, it's eliminating the "blind" part that he advises.
Getting educated in metal matters will go a long way toward improving investor vision, says Christian, managing director at New York-based specialty consulting firm CPM.
But before cracking open metallurgical texts or geological tomes, metal-minded investors might enjoy a less-taxing introduction, by taking a trip to Manhattan's American Museum of Natural History.
All That Glitters
Through Aug. 19, the venerable museum is hosting
, a specially designed and painstakingly collected exhibit that takes attendees through the illuminating and rich story of the yellow metal.
"The exhibition is very education-oriented," adds Christian, who saw the show when it opened in November. "You start off looking at impressive ore masses, but then it backs off and shows you rocks," as well as details the processes used to extract the metal, and its end-product uses.
The idea for the exhibition came after some AMNH staff members saw a similar event at the Houston Museum of Natural Science and were impressed enough to want to bring it to New York City. Unfortunately, not all the items on exhibit could be lent, explains James Webster, curator of earth and planetary sciences at AMNH.
So the AMNH ended up creating its own glittering version.
"We added new pieces and in that process bumped up the science component of the show," Webster says. And that's where it may be an especially good start for those investors needing or wanting a primer in all matters gold.
Mankind is becoming more and more ingenious in finding ways to extract gold from lower and lower grades of ore deposit, notes Webster. Some of it he dubs "no-see-um" gold, which necessitates "digging bigger and bigger holes" and utilizing ever more clever recovery methods.
Even those who already come with substantial knowledge can learn something.
The exhibit is extremely comprehensive and does a very good job of displaying the various different roles gold plays in modern society," says George Milling-Stanley, manager of investment and market intelligence at World Gold Council in New York.
Milling-Stanley notes that the show has come at a time when there is a lot of interest in gold, not just from an investment standpoint but also from a jewelry angle.
Not surprisingly, the exhibition includes a host of modern and antique gold bullion bars, similar to those held by the exchange-traded funds,
streetTracks Gold Shares
iShares Comex Gold Trust
. Gold is so soft that employees moving some of these bullion bars (99.99% gold) into the museum were required to wear white gloves to prevent their fingernails from damaging the ingots.
But the show goes beyond stacks of glistening yellow bricks and looks at six other aspects.
The first outlines mineralogy and geology, an aspect that the best money managers in the space say is vital to grasp. Graham French, manager of the
Precious Metals and Mining fund, believes investors in the mining space need to
understand at least the basics.
"With a small, new, speculative company, it
has all to do with the geology and ... not to do with the financial earnings," he says.
The second aspect looks at the unique physical properties of the metal. For instance, how many ounces of gold would it take to gild a 12 x 12 x 8 foot room?
Or how and why was gold used in the moon landings?
won't spoil the fun on this one, but the answers can easily be found at the show.
The other areas are dedicated to art and fashion, monetary uses, shipwrecked gold treasure, and modern awards such as the entertainment industry's iconic statuettes. Visitors will learn that jewelry from South Asia (e.g., India) is usually of higher purity than that made in the West, and is sold based on weight.
The show is still open for another seven months, but those who can't get to New York by then may still be in luck. The exhibition, which contains more than one ton of gold, is expected to go on tour nationally and perhaps internationally.
(At the time of publication, museum officials were certain it would travel, but not yet exactly where or when.)
It's fair to say the exhibit is excellent at outlining gold's history. But as CPM's Christian ably points out, from an investor's viewpoint, that only goes so far.
"It's not where gold has been, but where it's going
that matters," he says.
Ah. If only we knew.
To view Simon Constable's video take of today's Good Life segment, click here.
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