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Record Gold Prices: Sell or Hoard?


The last quarter of 2010 will go down in the books as establishing a new record gold price. In fact, it established “a new record” several times.  The price is still rising.  So is it time to sell or time to hoard?

Let’s look at several things.  We all know the price of gold reacts to how people feel about the stability of currency and the economy.  If the mood is confident (which would be reflected with a rosy U.S. Consumer Confidence report as well as retail and home sales) it’s because Americans are feeling good about the value of their dollars and inflation holds steady as the money circulates in the economy.  They spend, put money in the stock market and sometimes “invest” in big screen tv’s and iPods. 

But if lack of confidence strikes, they buy gold as a hedge against inflation.  They start to buy or hoard gold “just in case.” The price shoots up, but there can be back and forth play between buying and selling.  

Should Americans rush out to sell gold?  Selling is up by those who are suffering economically and are using sales of family heirlooms to pay current expenses.  Until the economy recovers, this may continue.  For them, it’s an ideal time to sell.   

What about for businesses? Yes, for a business such as a pawnshop or dental lab, the time is also right because the prices being paid at Manhattan Gold & Silver are at record highs because of the new gold peaks.  Your business may take in gold and sell it a short time later and reap a small benefit.  Holding onto gold supplies makes little sense for a small business which is every bit as likely to lose money by holding assets.  Regular scrapping of metals on a monthly or weekly basis will cost average your sales.     There is no need to stress over fluctuating gold prices.  It’s the same as steady investing; you will yield better returns and will not lose any sleep.  In fact, it’s potentially dangerous because prices can fall.

Will the price improve? Possibly, but in between are wild swings, downtrends and other unpredictable moments.  Make your best deal possible and go with it, factoring in your own needs such as closing your books at the end of the year, taxes and expectations for your business in the coming months.  

The most common question to us at Manhattan Gold & Silver, what do we think gold is going to do?  If we had this answer, we would be answering these questions from the beach with a margarita in hand!


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