Executive Summary

• Calculating the "floor" beneath which gold will likely not fall
• The coming Great Wealth Transfer, which almost certainly will occur in our lifetime
• How much to invest in gold
• How to invest in gold
• Exit strategies: when will it make sense to sell your holdings? And what should you exchange them for?

The Floor

The one place that I most like to buy something is as close to its replacement value as I can.  And the replacement value for gold is both below its current price of $1,080 and rising steadily. There’s a floor under the price of gold which, like any mined substance, is determined by the cost to get more of it out of the ground.

As has been true for all mining and oil production, the all-in costs of getting gold out of the ground have been rising, and rising sharply, for many years.  Currently the all-in cost to produce gold, across the whole industry, is more than $1,200 per ounce.

Today we're seeing lots of signs of obvious distress among gold producers because the price of gold is below their cost of production.  This will cause supply to…