Last week, I saw 2 commercial on TV involving gold. The first commercial was to turn in your gold jewelry for cash. The second commercial was to buy gold as you could make lots of money since gold was going to rise to $2,000 per ounce.
Which one is most likely correct? If you have gold jewelry that you no longer need convert it for cash. Little justification exists for having gold at $900 from a supply demand or commodity price perspective. Gold is at this level because investors need a place to invest as investors are currently avoiding the stock market and get no return by investing in short term bonds.
Once the investing environment changes money will flow from gold to other more reasonably priced alternatives.
It makes no sense to believe that all other metals and commodities can drop by at least 50% and think that gold can maintain this elevated price.
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