As of this afternoon, 3 July 2013, the spot market for gold is US$1,249. This price is almost 50% lower than its all-time high two years ago but on the other hand it is almost 50% higher than its price nearly five years ago in October 2008. As recently as last December gold stood at $1,786.50 and as many know the precious metal has endured a turbulent 2013 with downward pressure on its price.
However it’s important to keep the big picture in mind. Since 1968 the price of gold rose by an astounding 3,454% – this includes gold’s doldrums during the mid-1980s when certificates of deposit at American banks paid almost 20% interest and the US dollar was almost at par with the British pound sterling.
The reason for this increase in price of course is due in large part to the inflation endemic to a fiat currency. Since 1971 when President Nixon removed the direct convertibility of the dollar to gold (ushering the US into today’s fiat currency) inflation has ravaged the value of the greenback. One source says that a dollar in 1970 has the same purchasing power as $6.09 in 2013. Another source quotes a value of $6.02. Even the US government’s CPI inflation calculator says that $6 today buys what $1 did in 1970. This is an inflationary rate of 600% in one generation.
Benjamin Franklin’s most famous quote – “In this world nothing can be said to be certain except death and taxes” – should be expanded to include inflation in an economy driven by a fiat currency. And given the Federal Reserve QE policies over the past five years, creating trillions of dollars out of thin air, the purchasing power of the dollar can only fall further.
The image below courtesy of Zen Gold graphically represents the growth of gold since the “Nixon Shock”:
Conventional wisdom says that gold has been a hedge against inflation because across the centuries it has kept its worth. The graph above gives an indication just how the US dollar and British pound sterling have devalued since leaving the gold standard. Note the relative stability of gold prices from 1900 to 1971.
If you’re looking for a safe investment for retirement physical gold will be a haven for your wealth, just as it has been for thousands of years. And as more currency is pumped into America’s money supply it’s inevitable that the value of the dollar will decrease.
The current lull in gold prices should be recognized as an opportunity for the investor to either begin accumulating gold bullion or further increase his or her holdings. A precious metals IRA with a horizontally integrated portfolio including gold and other metals such as silver, palladium and platinum (all of which are permitted to be held in a precious metals IRA) is the investor’s best protection in retirement against inflation and catastrophic economic upheaval.
Every person’s situation is different; the rule of thumb is that the closer one is to retirement the less risk one should take. But it’s easy to rollover an existing IRA or 401k account into a precious metals IRA and if the investor does his due diligence he will find that the best company to approach about a gold IRA is Regal Assets. They have immaculate customer service and are more than happy to walk the investor through the process of buying gold and opening, transferring or rolling over a conventional IRA. They are also a Better Business Bureau “Accredited Business” with an “A+” rating as well as a TrustLink “Preferred Member” with a five star rating.
Contact Regal Assets at their website to request your free Gold Investment Kit or call them on 888-981-7445 and you can begin protecting your financial future with gold or other precious metals. Retirees say that their biggest worry is inflation – get the peace of mind that the wealth you’ve built over a lifetime is safeguarded by investing in gold.