This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Sell the Jewelry & Fillings, The Gold Rush Is On!

Time to take inventory of the possible Fort Knox of fillings inside our mouths, tucked away in closets and stuffed in jewelry boxes -- we are in the midst of gold mania!

Gold prices hit a record of $1,432.50 on Dec. 7, and the result is a kind of nuttiness that has encompassed gold mining stocks, gold bullion, and generous outfits like Goldline that want to take your money in return for gold. There is even a gold-prospecting TV show on the Discovery Channel, which claims to have hauled in 2.9 million viewers on its premier episode.

Now, I'm not foolish enough to judge whether this gold bubble is about to burst, or whether there is even no bubble at all, as that is clearly an area in which persons of goodwill can disagree. I can only suggest, on the basis of my own scanty evidence (and sore mouth) that gold is starting to make me nervous. It's just a gut feeling: ¿

Too many amateurs buying and sharp operators selling. The 29% 2010 run up through Dec. 7 (a day with certain unpleasant connotations to begin with) reminds me of the time when I was a kid and off-track betting was beginning in New York City. I bet my lunch money on a couple of races, won, and then proceeded to lose every single race after that. You can't even get a note from somebody on Gmail, if the subject is gold, without seeing a Goldline ad. Putting aside the politically charged nature of a major sponsor of the Glenn Beck Show, there are people I respect (like Barry Ritholtz) who say the company overcharges for coins and is generally no good. (And other people I respect saying otherwise). Putting aside that hot potato, the potential for small investors being ripped off in this commodity, or any commodity, is just too troublesome, particularly when prices are going through the roof like this. And ask yourself this question: Are our regulatory watchdogs really up to the job of policing the gold market, when they've failed so miserably with everything else? ¿

Gold is a knee-jerk contrarian's nightmare/paradise. Yes, I realize that there are sound, fundamental reasons for gold bulls to believe that gold will continue to climb, perhaps past $1,500 or even $2,000. Central bank purchases, instability in Korea, deficits and inflationary threats, etc. etc. are all good reasons for gold to increase. But if memory serves me right, wasn't global uncertainty and inflation also a good reason to invest in real estate a few years ago? There are just too many reasons for nervous people and kneejerk contrarians to get concerned (or delighted, depending upon one's long/short exposure). Personally, I get nervous when I see the like Gold SPDRs (GLD) climb through the roof as they have on immense volume. I call that sucker bait. I get nervous when I read that gold funds are beating the pants off the S&P, and that some are climbing up to 66%. This means more money pouring into gold funds from the aforementioned amateurs, who love to climb in at the top, and consequently more money pouring into gold mining stocks, which are already rallying a bit too cheerfully. (I'll be coming to that in a moment.) Besides, Goldman Sachs (GS - Get Report) is predicting that gold will climb to $1,690 an ounce over the next year. Gee, they wouldn't gamble against that prediction, would they? And if they did, do you think they'd get away with it? ¿
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
ABX $12.25 0.00%
GS $146.13 0.00%
GLD $118.36 0.00%
NEM $25.78 0.00%
NG $4.84 0.00%


Chart of I:DJI
DOW 15,973.84 +313.66 2.00%
S&P 500 1,864.78 +35.70 1.95%
NASDAQ 4,337.5120 +70.6750 1.66%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs