Sound Off!
April 18, 2011
Sound Off Pt II: This Time It’s Personal
June 2, 2011

Gold: The Ups and Downs

Taking a real quick break between posts about music equipment to talk a little bit about something that concerns a lot of our customers, and that’s the gold market. Lately, it seems that we have had many customers come in confused and surprised about the value of gold and the direction it has gone and is going. While there isn’t enough room on this whole blog to fully cover the gold market (and indeed, people have spent their whole lives studying and hypothesizing about it) there are some basics that may help give some understanding as to what’s going on…

Let’s start by breaking this down to it’s most simplistic concepts: money. The US dollar is actually a promisary note of value issued by the government, and for most of it’s first 200 years, it’s value was directly based on gold. This is refered to as a gold standard, and worked fine until things started going global…economically speaking. In 1971, President Nixon ended the US dollar gold standard, with the intention that the government have more direct control over the value of the dollar in relation to other currencies, and better control over inflation.

This led to gold becoming a sort-of currency of it’s own in relation to the US dollar, and historically speaking, whenever there are uncertain times, the economy will reflect this, meaning the value of the dollar will not be as stable or as strong, and then it’s value versus gold would shoot the value of gold upwards.

Is it all as easy as that to predict? Certainly not! As we said, there are people who spend their lives theorizing and predicting the value and direction of gold and other metals, and it’s all, at best, a very inexact science that’s very close to a guessing game. It is very unlikely that anyone could have known that the price of gold would have gone up six-times it’s value from just ten years ago! With a market value like that, now is a great time to bring your gold in to us and see how much you can get. We’ll see you there!

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