As near as we can tell, gold is fairly priced. It will buy about as much as it would have bought 500 years ago…or 2,000 years ago, for that matter. That’s what’s nice about it. It doesn’t make you any money, but it doesn’t lose you any money either.
Of course, the price of gold can still vary substantially. In the last bull market in gold – from the trough in ’67 to the peak in ’80 – gold rose 1550%. That was a good time sell. The next two decades saw the price sawed in half…and then sawed in half again.
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Don’t Mail in Your Gold
“What’s with all these ads to sell my gold jewelry?” writes a reader “Will I get a good deal on that?”
The short answer: No.
In general, the mail-order gold people are paying about 10-25 cents on the dollar.
We’re seeing monetary psychology at work here. It’s the feel of cash in hand. We have relatively unsophisticated people sending in “old” jewelry, and they don’t know what they have. The mail-order gold buyers are sending back a check, and the crinkle of that check makes people think they got a good deal.
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