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The gold market has been where the action is for investors lately. As a neurotic stock market and the European debt crisis spur predictions of a global financial meltdown, a vault full of gold is like a dose of Valium for investors. On Wednesday, the spot gold price was more than 1,200 dollars an ounce as fears of investors drive stock lower. Gold is wanted by European investors and banks as the Euro tanks and the dollar flutters. Investment gurus like Richard Russell are telling people to stay away from the stock market and buy gold stocks instead.

Resource for this article: Gold price soars, stock market tanks, cash for gold scams rise

Get cash for your gold

The prolonged economic downturn and soaring gold price have brought out cash for gold scam artists. MarketWatch reports that as cash-strapped consumers who rely on quick payday loans sell their gold to pay for everyday necessities, complaints against gold dealers are rising. According to the Better Business Bureau's website (BBB.org), the biggest offenders are companies saying they'll buy gold jewelry and advertising heavily on cable television channels.

Price soars for gold marker

May 13, only six days after the stock market Flash Crash, the gold spot price set a record high at $ 1,241, which is a 2 percent jump. The gold price has risen 34.2 percent since May 2009. But Fortune reports that the current gold market price, after it is adjusted for inflation, pales from the true peak in 1980, when the gold price hit $ 825.50 an ounce — $ 2,180.27 in 2010 dollars. It is expected that the gold spot price will rise even more as these stocks provide a hedge against risk in volatile markets. Fortune was told by Jeffery Nichols, managing director of American Precious Metal Advisors, that the gold market price could reach $ 1,500 an ounce or higher by the end of the year.

Get cash for gold scams

Scam artists in the cash for gold business are just taking advantage of the soaring gold price. Some cash for gold companies even build websites with the word "scam" in the address, and then swear they are honest. Some of these sites try to protect consumers. On cashforgoldscams.com, one consumer complaint says a couple went to pawn shops and got offers up to $ 350. They wanted more and went to Cash4Gold, which offers a "fast cash" option where the customers waive their right to dispute the amount they receive. The couple received a check for $ 67.70 two weeks later. The rings, a little over half an ounce of 14K gold, would have been worth about $ 500.

Cash for gold scam law

WXPI.com reports that U.S. Rep. Anthony Weiner believes that Cash4Gold, one of the biggest advertisers on TV, is systematically ripping off customers. Weiner is proposing legislation that would make all of these companies give customers bids on the jewelry and force them to return gold by insured mail.

With inflation, gold market rises

Gold stocks are the ultimate hedge against rising prices. Trillions of dollars in government bailouts in the US and Europe are adding inflation to the many fears investors already have. The Daily Reckoning reports that not just inflation, but hyperinflation is coming as the Federal Reserve floods the economy with free money. The U.S. National debt is already 12.8 trillion, but it will rise to $ 19.1 trillion after including the Fannie Mae and Freddie Mac balance sheets. Throw in all of the Social Security, Medicare and Medicaid, the debt is $ 79.1 trillion — 5.5 times the U.S. GDP of $ 14.2 trillion.

Expected to continue is run on gold

In his latest Dow Theory Letter prediction Tuesday, Richard Russell forecasts a huge stock market crash. Russell advises investors to get out of the stock market altogether, eliminate debt and convert all wealth into liquid assets. Many of the investors take Russell’s Dow Theory Letter very seriously. Chances are his prediction of a stock market crash will encourage a stock market sell-off and a run on cash and gold.

Citations

MarketWatch reports

http://www.marketwatch.com/story/gullible-consumers-may-get-gored-on-gold-price-sellers-beware-2010-04-22

Fortune reports

http://money.cnn.com/2010/05/14/markets/gold_record/index.htm?postversion=2010051413

cashforgoldscams.com

http://www.cashforgoldscams.com/scam2.htm

Tags: cash for gold, gold price, gold spot price, Quick Payday Loans