After gold reached the $1700 an ounce level it is again hot on the lips of analysts and investors around the world. Should you buy gold or sell it at current levels? That is a very good question. But if you look at the facts presented here at the start of 2012 you can pre-empt where the price of gold will be going in the next 6 to 12 months.
Do not be surprised if gold prices hit $2000 an ounce as early as 2013, as the economy further destabilizes and investors continue to look for safe havens and are in need of financial security in the coming years.
Many investors are starting to realise how the debt crisis in the euro zone is spilling over and affecting the U.S. and many other countries now. The bailouts are not working, and that is getting more people talking about gold and silver in the last several months. No matter how bleak the world looks, historically if you look back, gold and silver has always done particularly well during recessions and depressions. This is more proof and giving gold even more of a catalyst for prices to continue higher in the coming years.
There is a real shift in dynamics that has given strength to gold since 2008. With the negative interest rate environment the purchasing power of many currencies and risk of defaults keeps pushing gold to new highs without looking back.
Gold (inflation-adjusted) is still off about $500 - $600 compared to the prices back in 1980. The Chinese have realized the true power of gold for many centuries and with all the warnings around about an economic collapse developing have been hording gold over the last few years. Land and real estate in China is not doing well right now, but wealthier tycoons that have been offsetting their property investments with gold, silver and other commodities.
Central banks in the last 12 months have also been purchasing more gold, helping prices go higher. A few months ago UBS decided to raise its 3 month gold forecast from $1600 to $1850 due to the Greece crisis and ongoing problems in the U.S. Economy. Consumer spending right now is at an all-time low. That is not the real problem. The real problem lies with Obama and signing a law that that increase debt limits while cutting important spending and revenue increases in other areas. Doing this will have catastrophic consequences down the track.
Data released this week is expecting there to be a third QuantativeEasing (QE3). Italian and Spanish bonds have risen to record levels, and the yields on bonds are back above 6%, so the crisis is now spreading to Italy and Spain which is far more serious than the Greece because these countries are much larger. This sort of news is making investors nervous and making gold look more solid as a long term investment for investors small and large.
Analysts are predicting gains for the other precious metals. Silver is forecast to average $33.58 a troy ounce this year – up from Friday’s price of $27.75 but below last year’s average of $35.11. Platinum is predicted to average $1,624, compared with $1,400.25. Looking at all the facts and weighted evidence there is no surprise that gold will continue to climb higher over the next 12 to 24 months.
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