Wait, Gold At $50,000?

The grapevine is abuzz with talk of gold skyrocketing to $50,000 per ounce.

So, why is gold down today and still pressuring $1700? Let’s take a quick look at gold over the past six months.

Back around the midpoint of 2022, gold was at a six month and of course year low. The dollar has been strong this year on recession fears and global monetary conditions.

And yet, it has fallen further to today’s close of $1708.90 – up just a bit from the year low of $1694 touched briefly last month. And looking back further, it is up from the 5 year low of $1173 and down from the high of $2063.

So once again, it can easily go either way. The need for gold in manufacturing will likely always exist as well as the “need” for gold in jewelry.

The supply of gold largely stays the same seemingly continuing to meet demand. Although somewhat harder to obtain, technology allows gold to be mined at a feasible cost.

Gold is a long-standing commodity traded for millennia throughout the world. Precious metals are generally not consumed like “black gold” — oil. The biggest hit to the price of gold happened back in 2012/2013 when it lost a quarter of it’s value.

Gold at $50k

Gold rounds - gold at $50,000

Considering the unlikely idea that the supply of gold might dry up in the next year or three, what conditions might cause the price of gold to skyrocket?

In a recent interview, John Butler, author of The Golden Revolution, theorized in an interview Kitco published September 5th, “Today, the gold price is too low to allow markets to clear, because assets are over-valued vis-à-vis gold.” And further, “according to my calculations, you’re talking about something in the region of $50,000 per ounce.”

Currently with the Fed looking to raise interest rates 3/4 of a point, it would be more likely for the price of gold to falter in the short term. In this condition of inflation, looming recession, housing market woes, and uncertainty, the economy isn’t going to turn around on a dime.

Butler says the $50k mark is possible if the monetary system returned to a gold standard.

What’s the likelihood of that? Probably as likely that gold will jump to $50,000 this year. Or in other words, not very likely in the near future.

It’s not unlike what economist Jim Rickards said a few years ago. This is possible with a return to the gold standard. It isn’t as common as Bitcoin (or perhaps more altcoin) enthusiasts predicting prices “mooning.” But bulls and gurus often predict gold skyrocketing to $10k, $20k and even $50k.

So, while headlines continue to circulate about gold at $50,000, reading the entire headline makes it clear how possible and somewhat impossible this might be.

As a gold vendor, and having some of the best prices in Utah and anywhere for that matter, we would love to see gold pushing new highs again. We think gold is a great investment for now, hedging the economy and rainy days.

As we always say, there is no crystal ball here. Gold could as easily fall $500 as jump $500. We tend to be on the bullish side and look for rising prices as gold has historically outperformed most markets and inflation. If gold continues to hold through this uncertain period and starts to push up again we can see gold at $2000 levels again.

The all time high of $2063 was hit just 2 years ago. When the correction is over, it can easily see that level again.

If you are considering investing in gold, contact us about pricing for US Mint gold eagles.

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