Tuesday, May 18, 2010


I've been asked recently by a few readers if they should buy gold now that the shiny metal has reached highs here near $1,250 an ounce.  It is interesting how the notion that something is near a high spurs us to take action and get interested in something.  While I haven't been thinking about buying gold, I have been contemplating taking advantage of the mania and attempting to research the business of being a gold wholesaler. 

In my own experience when I bought my own physical silver and gold I found a huge disparity in pricing on the internet in attempting to find a good distributor.  Ultimately even when you've found someone with a long track record and a good reputation you have to trust that your Fed wire into electronic space will result in you receiving a package 3 or 5 days later.  In my examination of pricing I see that their is a HUGE difference between sellers in their mark up over the spot rate.  What is interesting is that the companies and websites with the best marketing pitches and targeted niche plays were by far the most expensive.  In fact, one company that markets and focuses on Christians was charging 3 to 4 times as much over the spot market rate than what I was able to obtain my metal!

At the end of the day I simply believe if I were to say that I was an honest distributor with a fair price, many would be willing to purchase gold and silver and American Eagle coins from the Goat!  After writing all of this as an intro I may be too late.  When the likes of these two companies join the mania, you have got to think that you are a bit late to the party.  Is my interest signaling a market top?  PROBABLY!!!  Please read the attached article that details that Sears and K-Mart are getting into the gold exchange business.

I can hear it now! - We've got a Gold Light special on isle 4!


Ok, to the point, do we buy gold?  I am not a buyer here.  I think the concern over the Euro and the ECB bailout has been the big catalyst for gold's move.  It is due for a pullback.  I am a buyer at the $1,100 to $1,050 level and not before - this would be about a 15% to 18% correction from today's lofty levels.

Finally, if you know of anyone in the gold business that would be willing and able to answer questions regarding that industry, please let me know.  As you might guess I am slow to move in these endeavors and I research this stuff like crazy.  I'd love to find someone and hear their individual perspective before spending more time on this project.

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