Why Gold Will Pass $2000 per ounce.

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Gold Bullion Coins:

Gold Bullion Coins are coins that are produced as actual currency by the United States or another Government. They usually have a nominal face value (for example: the one ounce, United States Gold Eagle has a $50 face value). Of course, no government sells at the face value. Instead they sell Gold Bullion Coins for the market value of the gold plus a nominal premium for making the coin.

Gold Bullion Coins are usually available in in 1 ounce, 1/2 ounce, 1/4 ounce and 1/10 ounce. It is less expensive to buy a 1 ounce coin than two 1/2 ounce coins because you pay "manufacturing costs on two gold coins instead of just one. The same holds true for even smaller denominations. It is cheaper to purchase a 1/2 ounce than two 1/4 ounce gold coins etc.

Liquidity is the other side of the equation. It is easier to liquidate (sell) a 1/2 ounce gold coin than a 1 ounce coin. It is also easier to liquidate a 1/10 ounce coin than a 1/4 ounce coin. However, right now, and in the forseeable future, gold is far more liquid than any other asset regardless of the denomination and size.

American Eagle Gold Coins:

1. American Gold Eagle Coins are 95% pure gold. Although each coin has the stated amount of gold (IE: 1 ounce) it also contains copper to "harden" the coin and make it less scratch resistant. This in no way detracts from the coin's value. In fact, it can be seen as a positive for investors because the Gold Eagle is more resistant to scratching and other defacements that could effect its value.

2. Gold Eagles were available through the United States Mint, which manufactured them. However, due to excessive demand, the Mint's availability is sporadic at best. Most gold bullion coins are therefore, supplied by the secondary market.

3. Because the Gold Content is guaranteed and backed by the Good Faith and Credit of the United States government, gold eagles are extremely liquid and do not require a certificate or asayer to prove value.

4. American Eagles can be purchased here: or through a reputable gold bullion dealer, or coin dealer such as those that are listed in the Google ads on this site.

5. Gold Eagles have a nominal face value (IE $50 on the 1 ounce coin). This means you can spend them at anywhere that American Currency is accepted. This means it would be highly advisable to keep them away from family members and friends that would spend them as cash. As the coin is really worth almost 20 times face value for its gold content, spending it for groceries is enough to make any grown man or woman cry.

It is recommended that you store gold bullion coins in a protective plastic sleeve. If buying them in a larger quantity is desired, they will often be packaged in rolls of 10 (1 ounce Coins). It is important that the coins are not scratched or defaced as this will effect their retail value.

Gold Storage options include home safes, bank safety deposit boxes or even bank vaults. The option you choose should depend on the quantity of gold you have on hand.

Large quanties of gold require greater security. Most individuals don't have the availability to provide this type of security in a home setting.

Mid-size quantities and smaller quantities can be divided up between home storage and a bank safety deposit box. As I mentioned in a previous article, "loose lips sink ships".

So, the best home storage place is one that only you will find and/or know about. If you use a bank safety deposit box to store your gold, remember, access to the key is access to the gold. Make sure you store the key with the same care you would store the gold.

This means, don't carry it around on your key-chain. Any criminal worth his weight in salt knows what a safety deposit box key looks like. With a few sophisticated friends they could easily plunder your gold stash before you even know its gone.

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Gold:

Gold is one of the rarest elements on the earth. As such, it is the perfect medium for exchange on the face of the earth. Gold has been used by almost every society as money and coinage. What makes gold so valuable is that it can not be replicated. Alchemists tried for centuries to make gold from other "heavy elements" like lead.

Gold is also a token of wealth. Monarchs, Wealthy Merchants and Aristocrats have used gold to ornament their hair, adorn their garments and as jewelry and art. Gold plateware was also used by the very wealthy at special banquets and feasts.

Today, gold is most popular in jewelry, like bracelets, necklaces and rings. It is no longer used as currency, but it makes an excellent investment none-the-less. Gold traded for $290 an ounce prior to 9/11 and that same ounce of gold is now worth over $850 and rising! That's almost a 300% return on investment! Compare that to any stock or bond investment and you will see that gold literally outshines them all!

Smart Investors know that gold hasn't even come close to its price potential. Paper currencies, like the dollar, have been gutted by over-printing which will lead to double-digit inflation and continuous loss of earning potential in the future. In fact, CITI financial came out and stated that gold will exceed over $2,000 per month as the dollar continues to loose its value.

Due to the fact that, the US govt. pays interest on its currency in gold to the Federal Reserve, a vast majority of gold holdings lie within the Fed's vaults and will never see the light of day. It takes 5 years to bring new gold mines into production, and even then, high-producing mines are almost non-existent. In fact, all of the existing gold in the world would fill a three story building the size of a tennis court!

Although banks can dump their gold holdings to bolster the dollar like they have done in the past, global insecurity simply means it is no longer possible for supply to keep up with demand! Amazingly enough, it is not a far reach to see one ounce of gold reach $5,000 to $10,000 per ounce when the dollar panic begins and trillions of dollars seek out a safe haven.

Consider all of the alternatives. Real-Estate, the most highly favored investment lost almost 30% of its value over the past few years and the search for a bottom continues. Because of a soft market, things will only get worst. Lower interest rates are often unreachable because of the difficulty of refinancing lower valued homes.

Lower Interest Rates have helped make existing bonds more attractive, but not even the best bonds are keeping up with inflation. In fact, the devaluation of the dollar will favor gold even more as foreign investors stay away from unstable government bonds and money market instruments.

We already discussed the stock market, but the bigger issue is the health of corporate America. Gold is no longer the hedge against the stock market. It is the only sound alternative. Earnings and Consumer Spending will only continue their downward spiral as the recession continues to worsen. Profits give corporate stocks their value. Lower profits will only force more and more investors into gold.

Then their is the gold jewelry market. While more and more individuals are selling their gold jewelry to generate immediate cash. It could be argued that just as many, or more are purchasing gold jewelry because they see it as a purchase that will keep, or even increase its value over time. Some countries, like India, also view gold jewelry as the best way to hold onto wealth during times of instability. If their is a better investment out their than gold, it hasn't presented itself.

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