Experts Amend Views On Certified Gold
Posted by Adam King on February 08, 2010
February 8, 2010 – Taking a dim view of both the United States economy and the global fiscal problems, some analysts are changing their opinions on certified gold and the direction of its prices. While split on the heights it will attain, many top traders and speculators believe that $1,500 to $2,000 per ounce or higher gold prices will be levels that investors have to come to grips within the next 9 to 24 months.
The general feeling is that many in the investment industry are disappointed by the lack progress in the US economy and financial instability in Europe. These problems keep many from believing that currency-based investments are stable enough to trust. Analysts see gold, currently around $1,065 per ounce as having good support at $1,075 and higher, suggesting that now is the time that many industrial buyers and private investors should think about purchasing the metal.
The idea that gold bullion will reach spot prices of $1,500, $2,000 or higher within the next two years is one that market specialists are beginning to embrace. The specter of inflation is now hanging over the United States and other countries that have poured billions in new money into their economies; inflation generally helps gold prices as it pushes the value of the dollar downward.
Gold demand is increasing among central banks, and this trend may increase rapidly. China and India are both severely underweight in gold reserves, China at 1.5% and India at 4.1%; these totals are in stark contrast to the European countries which average nearly 54% of their total reserves held in gold. These numbers are also confirmed by India’s purchase of 200 tons of gold from the International Monetary Fund and China’s interest in the remaining 203 tons.
With economic instability, strong price support for certified gold and increased demand by national banking systems, analysts have been increasingly more open to the idea of rising gold prices. As traders, governments and institutional buyers all look to increase holdings, private investors would be wise to consider doing the same.
Stewart Lawson
Senior Staff Writer – Certified Gold Exchange
Categories:
US Gold Market
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