Release: JULY 19, 2024
44 years ago, in some stores assumedly normal guys wore pistols on their hip. These were mainly untrained shop owners. The sidearms were meant to be a deterrent for would-be robbers. The stores in question were primarily coin and hobby shops. The year was 1980 and gold had reached $850 per ounce – then, a new record. Money and precious metals were abundant....
In today’s dollars, that $850 in 1980 equates to about $3,200. With an ounce of gold now trading for $2,400, it’s evident the precious metal hasn’t quite kept up with inflation. Conversely, also in 1980, silver rose to almost $50 an ounce. In today’s dollars, that would be just over $190. With silver currently selling for barely $30 an ounce, it hasn’t nearly kept up with gold.
There are still endless ads urging investors to buy gold and silver as a hedge against inflation. As both metals inch upward, many people seem to be succumbing to those come-ons. Globally, gold is most often traded in US dollars. That’s a reflection of the strength of the US economy. Even though many countries once had economies based on the gold standard, now, none do. That’s probably based on the fact that no country could fully cover all its debts with gold alone.
Because gold continues to have international demand, it is sought after and killed over in virtually every country on earth. From the US, to Russia, England, North Korea or Nigeria, the recognition of and demand for gold remains epic – as it has for the past 5,000 years.
Our collective lust for gold was recently exemplified in the conviction of Senator Bob Menendez. He was accused of and convicted on 16 counts of bribery and extortion. In addition to boxes of cash, over $100,000 in gold bars taken as bribes was also said to have been uncovered in his home.
For investors or collectors, one-ounce bars of gold are most often the size of choice. For those with deeper pockets, 10-ounce bars are often acquired. The same is true for silver – though heftier 100-ounce silver bars are frequently traded.
As much as we may covet gold in the US, our consumption doesn’t hold a candle to other countries. The largest consumer of gold today is China. Each year, the Chinese people snap up over 800 metric tons of the precious metal. That’s not surprising considering there are over six million millionaires in China.
What’s curious is the second largest consumer. That honor falls to India. Though they are far from a wealthy nation, their lust for the metal in insatiable. For longer than anyone knows, the Indian people have had a never-ending fascination with gold. It is prominently worn daily, especially by women, as an outward sign of wealth.
Today, India boasts fewer than 800,000 millionaires. At the same time, over 75 percent of the Indian population lives on less than $2.00 per day. Even so, owning and showing off gold is an almost mandatory custom.
Gold is so important to those in India, some go heavily into debt just to own some. They also buy small – sometimes just a few links in a gold chain. Gold bars in sizes as tiny as one-gram are widely traded in India and other poor countries. Considering there are 28 grams in just one-ounce, that is a microscopically small bar. Also, the smaller the bar, the higher the premium charged. Today, at some Wal-Mart stores, a tiny one-gram bar sells for about $125. Elsewhere, they can be found for around $100. Even at that lower price, the cost per ounce would be over $2,800 -- $400 more than the current spot price.
No matter how one feels about the long-term prospects for gold or silver, whether in a comparatively poor country such as India or a vastly wealthy one like the US (the US lists over 24 million millionaires—the most in the world) precious metals are still eagerly sought.
Coins from countries around the globe continue to be one of the best and most diverse ways to accumulate gold or silver. American Eagle gold coins in four sizes continue to be the most popular and recognized around the world. For those interested in history, US gold coins from the mid-to late 1850s bearing an “S” mint mark – signifying it was struck at the San Francisco Mint – most assuredly contain gold panned during the famous California gold rush begun in 1849. That’s a pretty cool way to truly hold a valuable piece of history in your hands.
For more collecting information and advice, log on to: http://prexford.com/.