There are all sorts of predictions out there today about gold and where it is headed.  I have heard $2,300, $5,000 and even $11,000 per ounce.  Many are educated guesses using previous highs adjusted for inflation, others use technical analysis and some are just down right made up out of thin air, just like the US Dollar is today.  It is more about what is happening that would create $2,300 per ounce gold or higher.

The way I see it is this, the gold bull market could peak through investment demand just like any other bull market top, or we could see gold’s value rise due to the devaluation of the dollar through money printing in which case there is no telling how high gold could go.  For our sake I hope it is the former because the latter would be devastating to our nation and the world.

At the height of hyperinflation in Zimbabwe bread was costing people in the trillions of Zimbabwean currency.  What do you think and ounce of gold was worth?  Much more than 1,000 trillion!  If the people of Zimbabwe had owned physical gold and silver at any price prior to the onset of hyperinflation, their purchasing power would have been maintained throughout that economic crisis.

The United States is on a much bigger scale than Zimbabwe.  The US Dollar is the world’s reserve currency and is tied into every country in the world.  If the dollar was to hyper inflate people would be moving into real money, gold and silver, very fast.  Unfortunately there is not enough supply of physical gold and silver to satiate that level of demand.

Recently on Kitco, Paul Nathan had this to say, “People say “I would never buy silver or gold at these prices.” But it’s not a matter of price.  It’s a matter of possession. At the end of a monetary collapse what matters is what you actually posses, not what you have claims to. Claims quickly become worthless.  The worse case scenario, the one that keeps me up at night, is that suddenly paper money will be shunned by the market and silver and gold will become demanded as payment for goods and services. If this should happen, we as individuals will go to trade paper for specie (physical currency), and there will be none. This means that all the wealth we thought we had, in bonds and savings accounts, money market funds and CD’s will be worthless.”

This is why acquiring physical gold and silver is so much more important than paper metal in ETF’s.  Physical gold is an insurance policy against a fiat currency being printed into oblivion.  Everyone needs some physical gold in their portfolio and I would rather be two weeks too early than a minute too late.  Start acquiring now to preserve your purchasing power.  Then you can live knowing you are protected and hope for the best.