People line up to buy cheaply made chinese crap at walmart. Does that make cheaply made chinese crap a good investment? Remember the housing bubble? When it was a bubble, Joe average was buying because he thought it was a good investment. Now joe average is selling gold because he thinks its a bubble. Moral of the story...always do the opposite of what joe average is doing. Joe average is selling gold. That means you should be buying it.
Strangely the same people who ask that question usually never ask it about the stocks they are buying, with the result that dumping money into an IRA, even during 1999 or 2007, is regarded as normal but dumping some money into gold is regarded as a fringe activity. Chris Weber has reported that when he goes to a coin shop the people selling are white guys hard up for cash selling off the Krugerrands that were in the family since the 1970s and the people buying are mostly Asians. Who is on the smart side of that trade? I don't know. I do know that the federal government currently borrows 0.40 of every dollar it spends and the state governments are bankrupt so the Fed can not afford to let interest rates go up much and would be quite happy with negative real interest rates so as to lower the debt burden. Low real interest rates are good for gold.
come to Canada and you can buy as much gold as you want from any bank or the many various storefront retailers of gold, either Canada mint coins, bars, etc endless locations in Vancouver: http://www.google.com/search?sclien...&site=webhp&source=hp&q=gold+vancouver+canada there was an interesting segment on a Pawn Stars episode where a guy brought in a gold bar that turned out to be sunken Spanish ? treasure a few hundred years old the 'mil/mill' - melt down value was $24k but the rarity value was estimated at $48k http://www.history.com/shows/pawn-stars/videos/sunken-treasure#sunken-treasure
If someone selling you stock is telling you that the stock can only go up in this economy, why shouldn't you be suspect? Normally, those who are selling stock are doing so to make money or to cut their losses. Or perhaps to cash in their assets. I don't know if anyone one who really thought their stock can only increase in value would buy tv and radio ads selling their shares. But what do I know....
Does this surprise you? If so, I have another really interesting piece of fact: you know how you can buy a canvas at the local art store for $20? Well, apparent, if this guy named Monet dripped some paint it, it's worth MILLIONS!
Answer to your first question -- yes, you should be suspect, that is why you should never trust your broker to make investment decisions. People selling their gold are also doing so to make money or cut their losses, or to cash in their assets. I don't know why anybody would buy gold from the guys with all the TV ads because obviously if they're spending money on expensive ads they're not going to have good prices. Smart people buy from dealers who post both their buy and sell prices and don't waste a lot of money on advertising. Coin dealers don't make their money by owning gold or by shorting it -- they hedge their inventories with futures and make their living on the bid/ask spread. It's in their interest to have buyers who think gold will go up, and also to have sellers who believe that because gold has reached record prices it's time to get CA$H4GOLD! (I've seen at least as much advertising for people to sell their gold as to buy it.)
3% spreads? N-word, please! The entire spread between bid and offer is <b>merely 1%</b> if you know who to deal with. http://www.tulving.com/goldbull.html ...and now you know who to deal with. You're welcome.