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Why Gold Matters for Ordinary Investors

By Dan Caplinger - Apr 20, 2013 at 3:15PM

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Many investors shy away from the yellow metal, but it has an impact beyond the gold vault.

Gold prices plunged this week, creating havoc and leading many analysts to declare an end to the long run-up in the yellow metal's price over the past decade. But ordinary investors may wonder why they should care about gold if they stick largely to conservative stocks such as those in the Dow Jones Industrials (^DJI 1.61%)

In the following video, Fool markets analyst Mike Klesta talks with Fool contributor Dan Caplinger about the impact that gold's decline will have on typical investors. Beyond exchange-traded funds that track the price of the metal and gold-mining stocks that count on high prices for their profits, Dan notes that many companies, including some Dow components, rely on a healthy gold-mining industry for their own businesses. Moreover, entire national economies benefit from strong gold prices, and the plunge may force them to accept slower growth or even recessionary conditions in the near future.

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Stocks Mentioned

Dow Jones Industrial Average (Price Return) Stock Quote
Dow Jones Industrial Average (Price Return)
^DJI
$32,637.19 (1.61%) $516.91
General Electric Company Stock Quote
General Electric Company
GE
$77.01 (3.33%) $2.48
Goldcorp Inc. Stock Quote
Goldcorp Inc.
GG
IAMGOLD Corporation Stock Quote
IAMGOLD Corporation
IAG
$2.30 (0.44%) $0.01
SPDR Gold Trust Stock Quote
SPDR Gold Trust
GLD
$172.76 (-0.18%) $0.32

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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