It’s hard to believe that the price of gold is almost $1500 an ounce! As someone who has personally seen the price of gold rise from its bear market low of $252 an ounce in July 1999, the surge seems almost surreal. I still remember the analysts calling for gold to drop to $200 an ounce! Amazing!

It’s been quite a ride so far and like many other bullion investors and enthusiasts, you’re probably wondering right now:

Is gold in a bubble? Have we reached the ultimate peak?

I am not a fortune teller; no one knows what the ultimate cap for gold will be. However, we can use history as our guide to what the highs were like in previous bull markets.

Remember real estate, the last big bull market bubble? Now think about what the peak of that boom was like.

Were your friends and neighbors talking and buying real estate? What was the hot topic of the day everywhere you went?

Okay, now think about gold. Do you know someone who has silver or gold coins? I don’t know about you, but the only gold my neighbor owns is his wedding ring, LOL.

Let’s go even further back to the great stock bull market of the 1920s. I remember reading a book years ago about the history of the great depression. Joe Kennedy (father of President John F. Kennedy) made a huge fortune in 1929 when he went short on the stock market. Why did he fall short? Well, according to legend, he overheard a shoe shiner giving stock advice. He knew at that moment that everyone and his brother were in the market and that it was time to leave.

So, I think it’s safe to say that when you hear the bag boy at your local grocery store telling you to buy American Gold Eagle coins, it’s safe to assume that the great gold bull market is over.

Also, keep in mind that gold’s all-time high is $2,400 (adjusted for inflation). We’re not even close to that level yet!

Even if $1500 is not the all time high for gold, I think at some point we will see a correction. The price of silver and gold are volatile, in any environment. That’s a fact. No bull market goes up without a correction of some kind. How big the correction will be, I can’t say. But, be prepared for a drop of some kind.

That said, I think the underlying economic and currency trends that support gold’s rise still hold:

  1. We have higher inflation.
  2. An accommodative monetary policy.
  3. We have a budget deficit that is downright terrifying, to say the least.

I don’t see these trends reversing anytime soon, do you?

Should I buy in case there is a correction?

In the past, it has paid off to buy on pullbacks. But you must be prepared for volatility if you are going to invest in this market. Don’t invest money in precious metals that you can’t afford to lose. That rule applies to any investment, not just gold.

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