The Gold Rush of 2011

Gold has broken the $1,600 per troy ounce level.  To some people it is beyond belief that gold could go so high.  It certainly is a mixed blessing.  On one hand, if you own gold you have seen an incredible increase in the value of your gold.  On the other hand, if you desire beautiful gold you’ll have to pay significantly more for it.

I find it interesting that people in India have for centuries adorned themselves with gold and even used it for payment for goods.  Their jewelry was often made of 22 to 24 karat gold.  This meant that it was very soft.  Soft enough, for example, to remove a link and hand it to someone else in payment for goods and services.  I like that, practical and yet beautiful!

I learned that information by reading history.  Perhaps one day our children will look back in the “bytes” of history (that’s computer age talk for textbooks) and recall the massive gold rush of today’s economy.

Now we’re not talking about a gold rush like we had in the early years of California.  That was a situation where gold was discovered and was being mined from the earth and sorted in the streams.  The gold in turn was sold and made many people rich.

Today’s gold rush is more of a move to either protect a person’s wealth or in some cases to help people ease some of the burden of the high cost of living in current times.  This gold rush is more like a safe haven for investors and/or recycling broken and unused jewelry for cash.  In either case it’s a huge phenomenon.

For fun, I researched how much gold is actually produced in the world in a year’s time.  It turns out that approximately one cube of gold is produced per year.  Granted, the cube is about 14 foot square.  To put that in more understandable terms you could figure that the world produces enough gold to fill an average size living room.  This cube weighs about 3,110,420 pounds.  You convert pounds to troy ounces, multiply it by $1,600/troy ounce and you’ve got about $72,576,465,600 dollars’ worth of gold!

Now, the million (or should I say billion) dollar question is will gold go higher?  The
general consensus is that the high price of gold is due to the economic troubles in Europe coupled with our own government’s battle over the debt ceiling.  Those in the know feel that once the debtceiling issue is put to bed the European debt crisis will step right back in and keep gold at its current level or nearly so.  Only time will tell.

Well, that's it for now!

Your friend in the jewelry business,

Mark Grader

Grader Jewelers, Inc.

www.gradergems.com

www.facebook.com/graderjewelers/

P.S.  If you’re wondering whether you have treasures or trash in that shoebox, stop by and see us in our Waterford store.  We're glad to help you sort them out… at no charge.