Did Gold Really Reach an All Time High?

Article Written October, 2009

We are first and foremost a rare coin company. But, by nature we take a lot of calls about gold and silver investing. As a result we trade gold and silver bullion on a regular basis, forcing us to keep tabs on the metals market.

The recent bull market has moved the gold spot price to record highs. Gold has appreciated by 290% in the last eight years. But, during the 1976 - 1980 inflation boom, it rose an incredible 721%! In fact, when you adjust the January 1980 gold price of $850 for 29 years of inflation, it translates to a whopping $2,347 per ounce in 2009 dollars.

The short term market will rise and fall, but we predict precious metals will move significantly higher over the next few years and that in that time frame, gold will hit a real all-time high, adjusted for inflation.

Inflation is sneaky. It slowly makes us feel richer as our equity expands - home values, stock prices, and other investments increase. It all looks good on paper. But, when adjustments are made for inflation, many of those gains aren't real. And, when the market takes a bite, it can look even worse.

Tangible investments generally rise with inflation, rare coins included. While many economists hint at recovery, we see little improvement in the overall economy and a further weakening of the dollar. Part of the recent surge in precious metal prices is due to concerns of the dollar's future as the top world currency. With inflation on the horizon, many sophisticated investors are turning to tangible assets to safeguard their personal worth.

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