subject: Do You Have To Purchase Gold Now? [print this page] As these words are being written, gold is consolidating at the $1,640 an ounce level after peaking at $1,900 on August of 2011. In addition, gold seems to have gotten below both its 50 day and 200 day shifting averages. There isn't any shortage of financial commentators over the Wall Street spectrum that's prepared to come up with gold's obituary but wait... is the bull market in gold really finished?
The most interesting point about all of this is the Wall Street total opinion. A viewpoint, which hasn't deviated for many years. The consensus view is that gold is a barbarous relic and thus a bad purchase. After all that's what Keynes stated and how can Keynes, be mistaken. Then Wall Street was mugged by gold. For 12 successive years, gold out shined the S&P 500.
But, the true account is far worse than that. In August of 1971 president Nixon took the United States off the gold standard. Then gold was pricing for $35.00 an ounce. In the 41 years since 1971, the buying price of gold has gone up 54.28 times to its all time high of 1900 as well as 46.85 times to its present high. During those times the Dow Jones industrials was then trading at about 890. The Dow peaked in October of 2007 at 14,164 for a rise of 15.91 times. Its current value is 13,038 a rise of 14.64 times.
Wall Street wanted a new story. The new scenario was that gold was in a bubble and therefore shouldn't be acquired. Instantaneously it went from being a barbarous relic that had been a terrible purchase to being a bubble without ever being a buy.
The very first thing you must find out about gold is its astounding rarity. The respected consensus is that right from the start of documented history to the present between 150,000 metric tons and 165,000 metric tons has been produced. At its most positive, that translates to about.76 troy ounces per person. To put it differently if you gave every man on earth a fairly significant gold ring you'd probably wipe out the world's gold supply.
