“Believe me, the printing is going to continue, the value of the dollar is going to go down and gold will go up.” – Ron Paul
Gold prices have been in the news a lot lately and with good reason. The question lately has been: Where is the bottom? Recently, quite a few analysts have spoken up and said that the bottom has been reached, but there are differing opinions on whether the climb back up will be extreme or gradual. The “magic” number of $1,300 per ounce has been surpassed triggering a number of buy orders, but day-to-day the price is still unpredictable. CNBC recently asked former congressman Ron Paul for his opinion on the gold market.
Ron Paul starts the interview by pointing out that there have been a lot of excuses for the big swings in gold lately, but “fundamentally they are still printing money and will continue to print money, so the value of the dollar will continue to go down and gold will go up.” He also comments on the shortage of physical gold and he goes on to say that after these types of corrections we usually see “an explosion.” Dr. Paul definitely comes off as bullish on gold and his opinion is that at some point the price of gold will spike back up very quickly.
CNBC also brought in analysts Anthony Grisanti and Jeff Kilburg. Mr. Grisanti feels that the drop in the value of the Yen has temporarily increased the value of the U.S. dollar and this has driven gold prices down, but he feels this is only temporary. Both Mr. Grisanti and Mr. Kilburg agree with Dr. Paul’s assertion that governments will continue to print money and this will drive the value of the dollar down over the long term, which will in turn drive gold prices up. Mr. Grisanti thinks that if gold can surpass $1,338 then that would signal the start of the climb. Whether or not gold is nearing the “explosion” Dr. Paul predicts remains to be seen, but the consensus seems to be that it is not far off.
With the recent plunge in gold prices, most established investors have resorted to selling. On the other hand, new investors are taking advantage and joining the gold market. Well, as the old adage goes ‘another man’s trash is another man’s treasure’.
I think that this is the right time to own physical gold and those that are selling are making a big mistake. Remember that gold reserves are ever diminishing as ores continue to get depleted. The fed on the other hand continues to print more paper money. That is why gold and other precious metals will remain to be a store of wealth!