Gold Price Soars, Stock Market Tanks, Cash For Gold Scams Rise

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The action lately has been in 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. Investors fear continued to drive stocks lower while the spot gold price started at more than $ 1,200 per ounce on Wednesday. European investors and banks around the world want some gold. Investment gurus like Richard Russell are telling people to stay away from the stock market and buy gold stocks instead.

Resource for this article: Gold price soars, stock market tanks, cash for gold scams rise

Get cash for your gold

Cash for gold scam artists have come out due to the soaring gold price and prolonged economic downturn. MarketWatch reports that as cash-strapped consumers who rely on quick payday loans sell their gold to pay for everyday necessities, complaints against gold dealers are rising. According to the Better Business Bureau’s website (BBB.org), the biggest offenders are companies saying they’ll buy gold jewelry and advertising heavily on cable television channels.

The gold market soars in price

May 13, only six days after the stock market Flash Crash, the gold spot price set a record high at $ 1,241, which is a 2 percent jump. The gold price has risen 34.2 percent since May 2009. But Fortune reports that the current gold market price, when 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. Fortune was told by Jeffery Nichols, managing director of American Precious Metal Advisors, that the gold market price could reach $ 1,500 an ounce or higher by the end of the year.

Cash for gold scams

Cash for gold scam artists are 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. There are some sites seeking to protect consumers. On cashforgoldscams.com, one consumer complaint says that a couple went in to different pawn shops and got offers up to $ 350. They wanted more and went to Cash4Gold, which offers a “fast cash” option in which customers waive their right that they originally have 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 U.S. Rep. Anthony Weiner believes that Cash4Gold, one of the biggest advertisers on TV, is just ripping off all their customers. Weiner is proposing legislation that would make all of these companies give customers bids on the jewelry and force them to return gold by insured mail.

Gold market rises with inflation

The ultimate hedge against rising prices are gold stocks. Trillions of dollars in government bailouts in the U.S. and Europe add inflation to the current batch of investor fears. The Daily Reckoning reports that not just 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 Social Security, Medicare and Medicaid, the debt is $ 79.1 trillion — 5.5 times the U.S. GDP of $ 14.2 trillion.

Run on gold expected to continue

In his latest Dow Theory Letter prediction Tuesday, Richard Russell forecasts a disastrous stock market crash. Russell suggests investors should get out of the stock market, pay off debt, and convert assets into cash. 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.

Additional information at these websites

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

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