It's been a couple of times now that I've read somewhere, or overheard someone shouting that gold is heading for as much as $5,000 an ounce, and I can't help but think to myself that I've heard all this before. Say, back when oil was playing with $160-$175 per barrel. I remember hearing then that oil could reach as much as $500. The reality is that long before gold can ever reach such heights the bubble (and that's exactly what it is) will burst. As with anything money, there's a resistance.
Right now the dollar is in a world of hurt. The economy has still not fully recovered. Jobs are still not stable. Credit is still unavailable to a lot of people. Those facts fuel the surge of people (and nations) heading into gold as a way to hedge against a tough market and hoard cash. Just like I spoke during all the hype about oil falling like a brick, it did, and so will the price of gold. Realistically I think we can see $1,500-$2,000 an ounce, but much higher than that just seems unreasonable to me. And by the time it would reach that, I think an improved economy will already have worked to fade some of the interest in gold investing.
For me, when it gets a little far fetched, that's when it's time to get out.
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