Current prices in the gold market are very affordable considering the value of gold coins in the current market.

March 21, 2012 – Current prices in the gold market are very affordable considering the value of gold coins in the current market. We are currently experiencing a correctional phase in the gold market that is characterized by the 13 percent drop in prices from recent highs. The current downtrend began three weeks ago with an announcement from Ben Bernanke concerning the third round of Quantitative Easing.

At first, Bernanke deferred the easing altogether, which caused a very serious market reaction and began the downturn in gold. Ironically, now that we see a few stable economic reports have come out of the US, a Quantitative Easing program announced at that time might have been a kick start right where it was needed and solidified the US recovery. We are already seeing serious concerns about youth unemployment and further negative indicators in the real estate market that will threaten the image of the US recovery increasingly and erase all the exuberance the news brought to the market, specifically the stock market.

By that time, however, the price of gold will have already resumed its upward climb and investor demand will have resumed as the reality on the ground sinks in. Use any real indicator you prefer. How many people do you know who have begun working or found a job in the past 3-6 months and how many are unemployed? Are you paying more or less for a loaf of bread? A gallon of milk?

Prices of real good have increased astronomically and people are working less. This is unidirectional market. Gold will be valued in higher terms on a nominal basis going forward, if for no other reason than the inflation we’re seeing in real goods. Even without safe-haven buying, gold is still the best investment as a method of protecting your wealth against the staggering inflation that will ripple through the market for years to come.

In that sense the price of gold is nowhere near its actual market valuation. The goods and services an ounce of gold will purchase will remain at a relative parity as they always have. However, due to an incredibly inflationary market the nominal value in dollars of goods and services will continue to rise over time. The price of gold is extremely affordable considering the value of gold coins going forward.

Kevin Johnson

Senior Staff Writer –

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