It’s unlikely in the modern global economy that making gold illegal in the United States would do any more than hurt smaller, middle class investors who can’t easily buy gold globally. Also, any talk of making gold illegal would dramatically increase its price (like Heroin), thus being very counter-productive. Further complicating the situation is that a great deal of gold is already in circulation, making it difficult to outlaw. A large black market for middle class gold could easily develop.
Also, people often forget that, unlike our stock market, the vast majority of the demand for gold is outside the United States. So, the price is very much determined by international market. Whether the United States makes gold illegal or not is only one factor affecting the price of gold. Since most demand for gold is outside the United States, it certainly won’t be the largest factor.
There’s no guarantee the U.S. Government wouldn’t make owning gold illegal, but given the problems just mentioned and the limited positive benefits for government, we think it is unlikely. Also, to even get to the point where the government is concerned about it, the price would have to rise very dramatically from where it is today, making it very attractive investment.