
Recently, all the action has been within the gold market. As a neurotic stock market and the European debt crisis spur predictions of a global financial meltdown, a vault full of gold is like a dose of Valium for stressed out investors. On Wednesday, the spot gold price was a lot more than 1,200 dollars an ounce as fears of investors drive stock lower. Gold is wanted by European investors and banks as the Euro tanks and the dollar flutters. And investment gurus like Richard Russell are telling individuals to avoid the stock market like the plague and purchase gold stocks instead.
Source for this article: Gold price soars, stock market tanks, cash for gold scams rise By Personal Money Store
Get cash for your gold
The soaring gold price and prolonged economic downturn have brought cash for gold scam artists out of the woodwork. MarketWatch reports that as cash-strapped consumers who rely on best payday loans sell their gold to pay for necessities, complaints against gold dealers are rising rapidly. The biggest offenders, according to the Better Business Bureau’s website (BBB.org), are companies saying they’ll buy gold jewelry and advertising heavily on cable television channels.
The gold market soars in price
The gold spot price set a record high on May 12 of $ 1,241–a jump of 2 percent six days after the stock market Flash Crash. Since May 2009, the gold price has risen 34.2 percent. But Fortune reports that the current gold market price, after it is adjusted for inflation, pales from the true peak in 1980, when the gold price hit $ 825.50 an ounce — $ 2,180.27 in 2010 dollars. The gold spot price is expected to continue rising as gold stocks provide a hedge against risk in volatile markets. Managing director of American Precious Metal Advisors, Jeffery Nichols, told Fortune the gold market price could reach $ 1,500 an ounce or higher by the end of the year.
Scams of cash for gold
Scam artists within the cash for gold business are just taking advantage of the soaring gold price. There are some cash for companies that use "scam" in their website address and then say they are honest. Other sites seek to protect consumers. On cashforgoldscams.com, one consumer complaint says a couple went to pawn shops and got offers up to $ 350. They wanted more and went to Cash4Gold, which offers a “fast cash” option where the customers waive their right to dispute the amount they receive. The couple received a check for $ 67.70 two weeks later. With a little over half an ounce of 14k gold, these rings would have been worth around $ 500.
Cash for gold scam law
WXPI.com reports that Anthony Weiner, US Rep., believes that Cash4Gold, one of the biggest advertisers on TV, is systematically ripping off customers. Weiner is proposing legislation that would require companies to give customers bids on the jewelry and force them to return gold by insured mail.
The Gold market really raises with inflation
The ultimate hedge against rising prices are gold stocks. Inflation is added to the current batch of investor fears by trillions of dollars in government bailouts in the US and Europe. The Daily Reckoning reports that not just inflation, but hyperinflation is the monster under the bed as the Federal Reserve floods the economy with free money. The U.S. National debt is already 12.8 trillion, but it rises to $ 19.1 trillion when it includes the Fannie Mae and Freddie Mac balance sheets. Throw in all of the Social Security, Medicare and Medicaid, the debt is $ 79.1 trillion — 5.5 times the U.S. GDP of $ 14.2 trillion.
Expect run on gold to continue
In his latest Dow Theory Letter prediction Tuesday, Richard Russell forecasts a stock market crash. Russell says that all investors need to get out of the stock market, pay down any debt had, and convert wealth into liquid assets. Richard Russell's Dow Theory Letter is taken quite seriously by investors. Chances are his prediction of a stock market crash will encourage a stock market sell-off and a run on cash and gold.
Citations
MarketWatch reports
http://www.marketwatch.com/story/gullible-consumers-may-get-gored-on-gold-price-sellers-beware-2010-04-22
Fortune reports
http://money.cnn.com/2010/05/14/markets/gold_record/index.htm?postversion=2010051413
cashforgoldscams.com
http://www.cashforgoldscams.com/scam2.htm