From the Sept. 18 Numismatic News E-Newsletter:
Q. Has gold reached its peak at $1,000 an ounce?
Here are some answers sent from our e-newsletter readers to Editor Dave Harper.
When the price of gold began its run up in 2007, a lot of people referred to the milestone of surpassing $850/oz., the previous high mark, set in January 1980. It reached $850/oz. again on Jan. 3, 2008. What most people fail to consider is the effect of inflation on these prices. After adjusting for inflation, the 1980 price of $850 is the equivalent to $2,226 in 2009. That’s how far gold has to climb to reach an all-time record and for anyone who bought gold for $850/oz. in 1980 to recoup their investment. In other words, gold is selling for less than half the all-time record price. I don’t know if it will get that high again, but I’m willing to bet that $1,000/oz. is not a ceiling.
No way has gold hit its peak. The Obama administration has made certain of that. I would say that Gold this time next year would be in the $1,800 to $2,000 area and could be even higher. Inflation will soar and so will gold.
All the media spin suggesting the recesion is over may get us through September, October and November without another meltdown in the stock market. But come mid-December when holiday sales are even weaker than last year, the long awaited second leg down for the stock market will take gold with it as the dollar rallies in a final flight to “safety.” I predict DOW at 5800 and $825 an ounce gold by year-end, followed by much higher gold prices in the spring when inflation perks up as this year’s tax credits begin to show up in tax refunds.
Kasnas City, Mo.
I believe gold still has another 20 percent room for growth, topping out at $1,200 by year’s end. Having successfully crossed the long touted $1,000 barrier with little resistance, it seems demand is still strong. Fearing a double-dip depression many people have adopted gold as an investing strategy to protect from a second dip and a weakening dollar. It’s likely that most of the “unwanted” gold jewelry (easy supply) has come out of mothballs and met the melting pot, making future supply a challenge. Strong demand with short supply can only lead prices one direction.
Jeff R. Mendenhall
Has gold reached its peak? Of course not! But its peak will not come until inflation hits. Frankly, I am suprised gold is currently at $1,000. But I attribute this to the weak dollar vector exceeding the deflation vector. Wait until a crisis erupts with Iran/Israel or hyperinflation begins for the real peak. Expect some drops in price until then.
Gold still has a long way to go up...the primary reason for its slow accent is price manipulation by the “gold cartel.”
I do believe that gold will reach higher levels. As I have researched, all the gold mining companies are continuing to mine more and more gold ore.
I’ve been around for a long time and I see gold as playing around the $1,000. for a good while but probably going past the $1,500 over the next few months. There will be ups and downs but with our economy gold can only go up.
With due apologies to Ella Fitzgerald, “This Could be the Start of Something Big!”
Stanislaus W. Pekala
Gold has not reached it’s peak at U.S $1,000 an ounce in my humble opinion because commodities such as beautiful gold are a traditional hedge against inflation of the U.S dollar. In my opinion inflation of the U.S dollar is far from over especially with this era of out of control government spending, and the two front war against terror that is being fought by our hero soldiers over there, but paid for by the unsung hero’s at home! So even though gold might retreat from the $1,000 dollar an ounce price temporarily it will be back to $1,000 an ounce soon, and realize even higher prices before the end of this year! These are exciting times for all comodities right now, and I can only wonder if the Hunt brothers have other relatives trying to corner the market on gold right now through proxy buyers because they are banned from the commodities trade, LOL!
Angel M. Robles
I enjoy reading all the articles you have written since signing up (6/08). Your articles are very informative to anyone that enjoys “good” information and your perspective of the financial world, in terms, of numismatic value and bullion value.
My input is from “my” collector point of view. Since returning back to the “hobby” of coin collecting (11/06), how the hobby has evolved (from the late 70’s). I am collecting for both numismatic value and bullion value except I am not selling. I am holding and building a collection of what I like. I might sell in 15-20 years from now and, maybe, save a few for my children. Generally speaking, I realize people get caught up in the madness of the dollar value and there are a few that are watching from the side (my case). And as for gold, the sky is the limit.
San Francisco, Calif.