I read that only 10% of American's , not including commercial investors, hold precious metals. Out of that 10%, less than 1% hold substantial amounts which are mostly commercial investors.
I agree that most people riding stocks can have a great income for retirement. Precious metals are not really held to retire on. Most people I know pass it down to the next generation like Scroog McDuck.
Bill
You are right that gold does not have that huge a percentage of smaller investors. The whales that buy gold in large quantities are the world's central banks. Due to debt levels of governments that issue all major fiat currencies, centrals banks are gradually downsizing their holdings of each others fiat currencies and buying gold. They have been doing that for several years, and that is a main impetus for the increase in the value of gold. Central bank holdings of all major fiat currencies - dollars, euros, yen, pounds, yuan, etc. - have decreased and their holdings of gold have increased. They have to do that on a gradual basis to avoid creating a run on any currency, but it is and will be a continuing process. If you want to anticipate changes in the gold price, don't watch investors, watch the central banks. Of course, there is an uptick in institutional investors getting in such as a recent report of Swiss pension funds moving money into gold, but it is the central banks that call the shots. Right now, there is not another game in town for them but gold.
What is also a good "tell" is that the big bullion banks that deal commercially in gold and silver are all long gold and long silver for their own book. When the bullion banks quote price targets for gold and silver, they usually turn out on the low side of where the price actually goes. There are a lot of other "experts" out there who forecast prices, one I just noted who has a fairly good track record, calling for $6,000 gold by Spring. I always take them with a grain of salt because it is central bank behavior that drives the gold price and none of these experts can more than guess at their volumes.
The small investor who gets into precious metals now is probably headed for silver. With bullion coins, the one tenth ounce gold coins are now up well over $400 each and the premiums are high on those smaller bullion coins, and the quarter ounce coins, also with a high premium although not quite as much are well over $1,000. There are lower premiums with some of the monetary gold coins with weights in those ballparks.
With silver, you are playing a commodity as well as a precious metal, as 70% of silver production now goes to industrial or military uses, over twice what it used to be. It is a commodity, however, that you can physically possess in a practical manner, unlike most commodities.
Some are calling for gold to hit $10,000 but I hope they are wrong, because if it does what that will mean would be happening elsewhere in the economy is frightening. For gold to go that high would mean such a weakening of fiat currencies and the overall economy it would have a lot of negative lifestyle impacts for society.
