Would You Buy Physical Gold At $2200/Ounce?

Can't vote without some qualifications.

I would have to do some serious price history research first, against the background of the then current World economic situation. It would also depend on what free cash I may have to spend at the time.

At $2,200 per ounce, gold may appear cheap or expensive, but I would have to do due diligence to find out.

no too high

2 years ago I didn't buy gold thinking it was too high ... year ago, before the jump I thought the same ... this year I changed my mind and started buying gold, small fractions (highest is 1/4 oz) ...
so, YES, I'll buy it at 2200/oz ... and when it goes to $20000/oz I'll buy it because at these levels it'll just prove that fiat is dead - why bother to keep it?!

It's all based on the falling value of the dollar. At $2200 gold, you can bet the dollar will also buy far less of everything else. Gold is a store of value, an insurance policy against run away printing of an unbacked currency.

How many of us are buying gold at $1850 or thereabouts today? If we don't like today's prices, we surely will not like $2200 any better.

I posted this poll after reading a forecast by Barclay's PLC; which said that gold was expected to him $2200 in the last quarter of this year.

It made me think about demand destruction. And how many people were really still buying physical gold. My sales of physical gold have dropped to almost zero in the last 3 months. I have sold one tenth ounce coin.

Like many of the rest of you I stack to as an insurance bet against the collapse of the fiat currency system. But I stack silver with just a few ounces of gold.

For three reasons.

The first is that silver has flat outperformed gold. I have made more money, far and away, flipping silver than gold. And I made more money flipping silver in any way you can consider; percentage, volume, total sales, ect.

The second is; lets say that the FRN becomes essentially worthless. Are you going to take that one ounce gold eagle to buy bread? And if so, will you accept fiat in change, or just go hungry? For me it makes more sense to pay in say, silver dimes; or whatever the lowest denomination I can get away with.

The last reason is that should I have need of short term liquidity do I cash in gold or silver? With Silver I have better control. I can convert just enough to cover my needs rather than converting more than my needs, and losing the excess.

Yes, I know I can reconvert the excess to silver. But it is like that $100 dollar bill you have in your wallet forever. The very first time you purchase something small with it, the change seems to vanish like smoke.

My experience as a dealer is that the average investor is purchasing silver, not gold. I think Ed made a good comment and perhaps a nice companion poll would be how many are still purchasing gold now; that were buyers before.

I have seen serious demand destruction in Gold. And I just returned from a business trip out to California and stopped at a number of shops along the I70/I44/I40 corridor. They all report the same thing.

I do understand there are an number of factors that could have been considered such as inflation at $2200/oz. And perhaps I should have indicated the timeline in Barclays prediction; this next quarter. As that would have eliminated a great many variables.

Thanks to all who participated.

Actually, I don't see that as a big problem. A smart retailer would simply accept a gold coin, make an entry in his ledger that Joe Smith has paid him 1/2 oz. of gold and purchased 2 bags of groceries, and give Joe a signed and dated receipt to that effect. The "change" stays on the books, so the next time Joe comes in and buys a couple of bags of groceries, the amount remaining on the books is reduced. This continues until all of the value in the gold coin has been converted to groceries.

Alternatively, and better if Joe also needs to make other purchases, would be that Joe got his change in silver that he could then use to buy other things from other stores. This change would come from other shoppers who came in with silver to make their purchases.

All this would certainly require some changes in how things are done but if the US dollar collapses, there would be MANY changes happening.

When my Grandparents were young adults, a large loaf of bread cost a nickle. Today, a similar loaf costs $3-4. If silver were to once again become money because paper was worthless, we could see a loaf or two of bread selling for a dime once again.