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Can the Gold Price Recover?

Gold climbed as high as $1923 per ounce in recent years, yet due to Ben Bernanke and his Federal Reserve’s shiftiness, as well as skepticism by some institutional investors, gold has since gone down, down and down some more. It was only a few weeks ago that gold was in the sub-$1200 range. Before that, gold had a crash in April that saw prices tumble from almost $1600 to just above $1300 in only a couple of days. Now, gold is at $1290 and poised to surpass the $1300 mark once again, but has permanent damage been done due to these drastic sell-offs?

Hardly. The U.S. Mint has reported record sales numbers for gold and silver coins on a consistent basis. Key bullion suppliers have been plagued by shortages throughout the year, while demand has continued to skyrocket. Why, then, has the gold spot price not reflected these parameters?

The marriage of the gold price to gold derivatives has been well-documented. Unfortunately for physical gold buyers, mass liquidations of gold ETFs have taken place recently and this has hampered gold’s growth. Make no mistake, our nation is still very much in a debt that is increasing with every sheet of un-backed dollar bills that is printed. Countries like Brazil, Russia, India, China and South Africa are buying gold in incredible quantities, and mom-and-pop buyers in the United States are doing the same.

Gold will recover. No one can say for sure if the recovery will be to the tune of $1500, $1900, $2,000 or more, but the one thing you can be sure of is that gold’s recovery will be much more evident than the “recovery” that is currently being touted by our nation’s monetary policy-makers.

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