If you pay attention to financial markets, you are probably aware that the price of gold has been skyrocketing. Not to long ago (the end of 2003), gold sold for $400 an ounce. Now, gold is above $1,400 an ounce. Gold has risen rapidly since the financial crisis, thanks to a number of factors. First of all, gold is seen as a safe haven. Many investors piled into gold for its “tangible” value in the wake of a financial crisis that had many uncertain over an economy based on fiat currency.
On top of that, gold is also seen as a hedge against inflation. With central banks around the world engaging in practices designed to kickstart inflation, gold seemed a good choice. And, of course, now many are worried about what happens to countries with large debt burdens. Debts left over from before the financial crisis, plus the new debt created to create economic stimulus, have some looking to gold. All of this means that gold prices are through the roof. Many, hit hard by the economy, are thinking that now might be a good time to sell their gold jewelry. After all, you can get $1,400 an ounce, right?
Not so fast. Chances are you won’t be getting $1,400 an ounce at all.
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