A Publication of Austin Rare Coins June 2008
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Gold Breaks Over $1,000 in 2008! Inflation-Adjusted Gold Price Trading Under Half the All-Time High Gold and Silver can provide your portfolio with safety and security– especially when the U.S. Dollar is falling and the U.S. economy is weakening. As Gold soared to a new all-time high over $1,000, some expressed concern that the best profits are behind us. We don’t agree. Despite the fact that Gold prices are up 295% to new highs since 2001 and Silver is up 415% to the recent highs, we remain optimistic about precious metals. Gold Would Need to Hit Over $2,000 Any time a market breaks through past highs, there’s lots of hoopla, praise, excitement. Everyone wants to jump on the bandwagon. But some people are skeptical– and rightly so. There are many ways to look at a market high. If Gold had hit $850 a few years ago, a high-to-high comparison would be perfect. But, the last time Gold traded at the $850 level was for one day only in January of 1980. That was over 28 years ago! To compare Gold highs across time, we must adjust the $850 high for inflation. Projecting prices backwards and adjusting for inflation, Gold must hit nearly $2,400 in today’s dollars just to equal the past high. While we are absolutely thrilled with the gains so far, an inflation-adjusted high of almost $2,400 leaves plenty of upside potential from here. 
Gold Buyers Not Knocking Down the Doors
Truthfully, we can’t project how high the market could go. It’s even tough to forecast where Gold might be at the end of 2008. Today, business is brisk. But, there’s no mad rush by the public to buy Gold. Sure, the savvy investors are discovering metals. But, they aren’t fighting their way into our offices... at least not yet. That tells us that neither Gold nor Silver is anywhere near its high in this bull market. An Important History Lesson Let’s add some perspective to the 2,428% run-up for Gold in the 1970s. You may recall Americans were not permitted to own investment Gold from 1933 until 1971. Gold had been "government controlled" at fixed prices since 1933 and world banks held most Gold. When Nixon took the U.S. off the Gold Standard in 1971, Gold was finally set free. A market kept artificially repressed for so long will have explosive price increases once it enters the free market again. Indeed, there was a massive pent-up demand to own Gold again that was unique to that time frame. Warning: Some speculators are forecasting this gold bull market will soar in value to 24 times the $255 low of 2001. That projects $6,000/oz for Gold. Frankly, you should not expect Gold to rise 2,428%. Our Best Projections for 2008 With that said, we still expect Gold and Silver to continue outperforming U.S. Stock indexes again in 2008 with a weakening economy, volatile stocks, the continued Sub-Prime crisis, and a falling Dollar. A few weeks ago, we predicted over $1,000 Gold in 2008 and Silver headed to $20.00. Now that both Gold and Silver have soared over these new highs, when we consider the long-term, an inflation-adjusted $2,400 Gold price and $133 Silver look like distinct possibilities before this bull market ends. If we’re right, many Gold millionaires will be created and Silver investors richly rewarded. You can be one of them– or you can miss out on this once or twice in a lifetime run-up in precious metals. Questions? Call a Gold Specialist at 1-800-928-6468
Austin Rare Coins, Inc. Serving Investors & Rare Coin Collectors since 1989 7200 North Mopac • Austin TX 78731
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