Gold May Exceed $2,000, Beware of Scams
Posted by Adam King on November 19, 2012
As more business leaders look with concern at the fiscal cliff approaching at the end of the year, gold as a safe haven is an investment that offers a lot of peace, so long as you are aware of the scams that always accompany higher priced investments.
Raymond Key, head of metals trading at Deutsche Bank, told Bloomberg News this week that he expects gold to surge past $2,000 per troy ounce next year.
In early trading Monday, U.S. gold futures for December delivery traded up $9.50 to $1,724.10 per troy ounce.
Peter Schiff, the CEO of Euro Pacific Precious Metals in New York, said the price of gold is going to go a lot higher than $2,000.
Schiff believes the reason gold isn’t already above $2,000 per troy ounce is that the average American doesn’t have a full grasp of the country’s current economic challenges. Schiff said people don’t understand the real situation in the U.S. and also said they don’t understand the global economy.
In the instance of that quote Schiff was referring to inflation and the fiscal cliff, which is a series of tax increases and budget cuts set to take effect in January when the new Congress convenes, unless they can agree on a budget. Partisan politics, as well as Washington grandstanding have prevented Congress from successfully avoiding the fiscal cliff entirely. Instead, they have only been able to agree on temporary measures to forestall dealing with the problem.
The Federal Reserve has pledged multiple times to maintain near-zero interest rates through mid-2015 as a part of its economic stimulus plan.
Schiff said you can own dollars and watch your savings evaporate. He added, in light of the inflation concerned with zero-interest rates, the alternative is to own gold.
Gold, though it has been in the process of a correction for much of this year, is set for a twelfth year of gains. Economic fallout from the European sovereign debt crisis, among other global economic concerns, contributes to gold’s attractiveness in current markets.
In the midst of current market dynamics, experts have warned consumers against gold-related scams. Goldline International agreed to pay $4.5 million to people who had bought gold coins in one instance and there are several reports from small dealers in towns across the country who have taken advantage of good Americans seeking capital preservation.
Experts warn to do business with large accredited companies that have been highly reviewed and have reputable professional affiliations in order to bypass the scams common with smaller dealers.