In 1805 the price of a gold coin was $19.

The dynamics of the gold market are like nothing else. One thing you will learn very quickly when researching gold bullion is that there is a constant suppression of gold prices by the central banks, Western nations, and big market players to keep the price low. Why? Because gold is in effect a competition to paper currency. Paper money has no intrinsic value. The confidence can go away, people stop using it, the buying power goes away, and you get hyperinflation. And hyperinflation is not uncommon in history. It is something that generally happens to paper currencies.

They Do Not Want High Gold Prices

If gold was to skyrocket in price, it would fuel further devaluation of competing currencies, most notably the US dollar. And so it is in the government's best interest to suppress the price of gold to keep the perceived value of their currency strong. And it seems they will do anything keep the price down - which means there is a ridiculous amount of manipulation in this market. And today, with the unprecedented demand for gold bullion- it's like holding a beach ball under water - because there is tremendous pressure that would under normal circumstances put gold at record prices.

Yet there are also some other interesting factors to consider as a gold bullion investor - such as the risk of government confiscation. In the 1930's after the Great Depression the US government declared a national gold confiscation policy (quite possibly the biggest scam of the century, second only to the current crimes of the Federal Reserve today). During a period from 1933 to 1954 you were a criminal and subject to 20+ years in prison for owning gold. Now, over 70 years later, the risk of another government gold confiscation is very real.

Predicting what the government will do is notoriously difficult. They may simply may make it illegal to own gold again or the attack could come in a different form: such as a tax on gold holdings, a freeze on gold sales, a ban on gold trading, or - they might just develop another pricing structure to hold the price of gold artificially low.

Withstand Fire, Rain, and Time

Regardless - gold is still one of the best investments, not as a short term vehicle, but as a long term hedge against inflation, economic turmoil, disasters, and you name it. Gold bullion is rare and will always have intrinsic value no matter what laws the government has in effect or what the manipulated price may be. In the long term - it will hold and gain value, just as it has for thousands of years.

Today, after an era of confiscation, world war, countless disasters, and incredible technological advancements - that same gold coin worth $19 during the year 1800 is now $804.