What’s Going On With Gold?

There’s no doubt that gold is currently doing very well. Just a few years ago this fine metal was sitting at the $800 per ounce mark and now it’s soaring above $1600. Are the good times coming to an end? Well, according to the experts, things are just getting started…

 

Warren Gillman, mining industry analyst and CEO at CEF Holdings predicts a gold bull market all the way through 2014 on the back of central bank buying and US monetary policy. Negative real interest rates worldwide along with central banks that are long on US dollars (while trying to diversify their holdings to include gold and other currencies) will keep prices strong he states.

Barclays analysts are bullish on gold too with prices predicted in the region of $1700 in the near future.

Tom Fitzpatrick, Citibank strategist believes gold will hit $1790 an ounce in the not-too-distant future, going as high gold news - what is going onas $2400 within the next year and $3400 not too long after. He believes it will keep getting stronger against the dollar but even more so against the Euro. In an environment of governments printing vast quantities of money, gold is being sought out as the safe, hard currency that it is, he states.

Matthew Bishop, NYC bureau chief for the Economist and author of ‘In Gold We Trust‘ feels that the long-term trend for gold has been so successful because of a deep-seated and new-found lack of confidence in paper money. He suggests that this trend is far from over and that gold is only half way through it’s meteoric rise. Governments failing to manage the economic crisis wisely are only making things worse and this could propel gold to $3000 per ounce, he reveals.

Director at Commtrendz Research, Gnanasekar Thiagarajan, suggests the weaker dollar and rising crude oil prices will only help gold to get stronger. He also believes it’s being viewed as a viable alternative to the US dollar now.

Speaking of a viable alternative check out our article now: Utah now has taken steps to make gold an approved currency

Eugen Weinberg, also at Commerzbank stated: “You need to look at gold as a currency, as a safe haven, as an insurance…I think that the risks in the economy are still, going forward, very high and although the markets seem to get accustomed to the bad news coming on an almost daily basis from the euro zone, I don’t think that the problems are over.”

MacNeil Curry, Bank Of America analyst sees no end to gold’s rise with it reaching anywhere between $3k to $7k since it has held this rising trend for the last 11 years. It has continued through inflation, deflation as well as both equity bull and bear trends.

Recent Timeline:

Looking to the start of May, there have been a few noteworthy occurrences that have had an effect on the gold price such as:

30 April: The elections in France and Greece as well as the European central bank meeting helped to bolster the dollar while the gold price came down a touch to $1658.50 per ounce.

1 May: Five days of gains saw gold hit a two-week high price of $1669.50.

2 May: US unemployment figures saw some improvement, which signaled a boost in morale for the nation. This saw dollar prices lift with gold feeling the pressure somewhat. Prices hit $1637.30 per ounce.

3 May: The US experienced higher factory orders, euro zone manufacturing eased, European unemployment rose to a record 10.9%, the dollar gained somewhat and European unemployment rose as well. These factors combined to lower the gold price to $1652.10.

Gold has a track record for doing well during tough economic times and uncertain periods such as wars and depressions. However, just one question remains: “How much longer will it last?

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