What's The Real Price Of Gold?

Gold last traded at $1,742 an ounce. Silver at $26.25 an ounce.

NEWS SUMMARY: Precious metal prices rose Wednesday on bargain-hunting and a flat dollar. U.S. stocks fell as investors awaited the outcome of the Fed's policy meeting and bond yields hit a 13-month high of 1.67%.

Rickards/Zero Hedge-"What's the price of gold? That seems like a ridiculously easy question to answer. I'm looking at a trading screen right now, and it displays a price of $1,733.80 per ounce....If only things were that simple. They're not. In fact, establishing prices for gold and silver is far more difficult than it sounds.

First off, the price I quoted above are not for gold in the traditional, physical sense. They are the one-ounce prices for COMEX gold and silver futures contracts. COMEX, a division of the Chicago Mercantile Exchange, is the world's largest futures and options trading market for metals....So we're talking about paper gold, not the actual metals....

In short, all of these trading venues - futures, LBMA forwards and the London Fix - have unique contract features that either have no physical bullion involved or have trading limited to big banks, which do business in large volumes and therefore are not accessible to everyday investors.

Even when the gold and silver are paper and not physical, the temptation to rig markets seems irresistible.

1) The cost of owning bullion coins or bars you can hold in your hand is materially higher than the official 'prices' you see listed on the exchanges. That tells you that actual bullion is considerably more scarce than paper bullion.

2) The second point is that the scarcity of physical bullion relative to paper gold and silver contracts will emerge with a vengeance in a buying panic resulting from any number of catalysts, including war, a new pandemic, a stock market crash, bank failures, or social disorder. The paper holders will try to convert to physical and find that it's too late. The vaults will be empty.

The lesson for investors is also clear. Get your physical gold or silver now while you still can. Don't sweat the commissions because that's the real price. Then rest easy. I predict gold will ultimately go to $15,000 an ounce. Commissions are nothing when you look at the big picture. The buying panic is just a matter of time."