I figure Joe Sixpack will start buying gold around $1500/ounce (assuming there is anything left of his 401K at that point)

J6P’s frenzy to obtain gold at any price will drive the third phase of the gold bull market – the price of gold in that phase is likely to reach heights that even the gold bugs won’t believe

As partypup is saying, intelligent gold bugs will be selling their gold to these latecomers and investing the proceeds into other asset classes

I suspect that sell time for gold will coincide with buy time for real estate – I’ll be paying cash for the real estate that J6P can no longer purchase because interest rates have become prohibitive (remember it was the 20% interest rate imposed by Volker that broke the back of the gold bull in the early 1980’s)

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another possible outcome is that gold returns to its status as the backing for currencies around the world (or at least as backing for the world’s new reserve currency, the yuan) – if this occurs, the price of gold will remain high and NOT drop back down as it would otherwise – Jim Sinclair (jsmineset.com) believes this will be the end-game for this gold bull market – I’m adopting a ‘wait and see’ attitude on this