Gold at new all time highs - where to from here?

In Dubai, a hotel has installed a vending machine for their clients to buy gold instantly. Prices are electronically displayed and change as the price of gold fluctuates during trading hours. Many European cities have made it more accessible for the average citizen to purchase gold. However, has gold become mainstream yet? Not really. Most people don’t know how to buy gold, what to buy, where to get it from, what the premiums are, who should store it…..instead they put their money into banks, stock markets, pension funds, mutual funds….indeed all “paper” assets. These paper assets eventually, in this environment of spiralling debt, may well become worthless. Gold has been a store of value for thousands of years. The Central Banks are buying up gold. For those of you who have not yet bought some gold, consider have a portion of your wealth in gold bullion just in case the whole system goes belly up.

Clients are asking me whether maybe its time to sell because gold has reached such a high level. My view is that with the uncertainties in Europe, from Greece, to Portugal, Spain and Ireland, the bankruptcy of at least 30 states in the US, the plummeting of the British currency and the ballooning of debts worldwide, we are far from complete with the current economic crisis. Some experts are predicting a huge drop in the price of gold – and indeed, I think we will see tremendous volatility in the months to come. However, for each fall, we will see even greater rises. Even at $1229 at the time of writing this blog, to some this seems very high. But it is likely we will look back on this figure and see it as a cheap entry into a metal that will continue to skyrocket.

If you don’t have to sell your gold, don’t. Stay the course. It will go to $1500 and beyond. This is just the beginning.