Precious metals?

Question

If the price of precious metals is calculated in U.S. dollars, what happens to the value of metals when the dollar crashes before the value of metals reaches their highest potential? Does the seller still get paid with U.S. dollars even if the dollar could be worthless?

Answer 1

assume that sellers are competent businessmen and your issue disappears -- the nominal price of the metals will rise to reflect the level of real world demand.

Thus, if the dollar crashes to 25 pence [versus the pound], you should expect that the price of gold will become 1600 USd per troy ounce and it'll happen overnight.

Answer 2

If you wanted. Like in Germany in the 20s with hyper inflation, the money became worth less and less per day.

Some gold and silver is held in your name and you never take possession of it, other forms would be in coins which you might. In the first case, unless that company folds and/or is not on the up and up, you should be able to have it converted into something of value. If you're personally holding onto gold coins or bullion, you could always use the centuries old method of barter.

Years ago, when silver got so out of sight, one man who owned a gas station was selling gas at so much per gallon but you had to pay in silver coins. At that time, silver in the U.S. was no longer being minted but some were still to be found in circulation. The price of silver to the value of the coin has to be around 8 dollars to break even. More than 8, the silver content is worth more than the face value.

Answer 3

No, because if the dollar were worthless you wouldn't sell your gold or silver for dollars.
You would hang onto the gold or silver until you could sell it for something of value.
Now you may need the money and sell it for less than you paid, that is the risk with any investment.

Answer 4

YES, that is the unfortunate part about buying commodities priced in USD. Therefore you should hedge your currency position so you make money both on the Commodity and the Currency