With Gold sitting at over 25 per ounce, one has to ask themselves, "how much higher will it go?" There are several key factors involved in the market trends surrounding Gold bullion. Just a few years ago it was trading at merely one third of where it is at today. An Investment of ,000 back in 2004 would be worth in excess of ,000 today. So, what are the factors involved in the future pricing of Gold?
US and World Inflation:
If inflation rises both overseas and abroad, we will see gold continue to head north. It is one of the biggest hedges against inflation. With the Us, and now Europe, in what many are calling extreme national debt, inflation may be quite high in the years ahead, especially if it causes the fiat currencies to decrease in value.
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Demand for Jewelry and Other Manufactured Goods
Gold is used both in Jewelry as well as many key components of electronics, since it has very high electric conduction properties. As China and India increase both their demand for gold jewelry as well as electronics like cell phones, the demand for Gold should continue to rise quite rapidly over time.
Many experts are predicting gold prices to rise in excess of 00 per ounce within the next 2-3 years. In my opinion these are rather low predictions, and we may in fact see Gold prices hovering around the 00 mark before 2015 as the US debt problem grows, and so does economic uncertainty. Of course the increase won't be a steady upward movement. Most likely we will see peaks and troughs with each peak outdoing the last. I would recommend an investment in the metal, however, don't overdo it as you should never put all your eggs in one basket. A great way to invest is to directly purchase Gold Eagle coins from the US mint and store them away in a safe place. If you don't like this idea, an investment in a Exchange Traded Fund, such as ticker symbol GLD, is the next best thing.
Why Gold Prices Will Continue to Rise
More information can be found at the JmGold Forum
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