Gold always has a bull market.And it has broken the $1,000 ounce level now.The demand of gold is increasing since September.Jewelry occupied about 70% consumption of gold each year.According to reports,about half of the Jewelry purchases are tied to Christmas holidays.Jewelry manufacturer always begin to buy gold bullion in August or September.
Even the gold price reaches a new level,this is not going to changed for inflation.If you talk the inflation into the consideration, you will find that the gold price should be over $2,000 per ounce.That will be a new record.Personally,I believe the gold price will hit $2,000 or even more in the following years and here is my personal ideas.
No.1,Gold is a commodity,and for all the commodity,the secular bull market can last up to 5 years.So there is still a long period for strong gold.The biggest price will be available in the latter stages of the bull market.
No.2,Gold always a safe-haven for investment.The value can be maintained or even increased throughout the ages.Since the world is still under recession,gold is still a good we should hold,it is definitely a good bodes for the price of gold.
No.3,The U.S. Dollar is still weak,and we do not now when the dollar will be strong again.For some fundamentally and technically reasons,it will not recover back soon.
No.4,The economy is still under recession and the US government is printing money.That makes the inflation even worse.People need a save investment before the major inflation comes to us.
No.5,The supply of gold is slowing down.Global central banks supply the majority of gold to the worldwide gold market.However,the supply has been slowed down recently.
No.6,the demand of gold is increasing sharply.especially in those developing market such as China,India.People in these countries are becoming rich and they need a safe to store their money,especially under the current economy climate.StreetTracks Gold Trust,is the largest gold exchange traded fund in the States is only four years old.
No.7,Many countries want to make their currency the world currency.Since the dollar is going down,many countries are thinking to switch their currency to world currency.In another words,U.S. treasuries might be depreciated any time.Therefore,if countries like Japan,China as well as other countries switch U.S. treasuries to Gold,the gold price will rocket into the sky.Besides,if those countries want to make their currency to world currency,they need enough gold to support their currency.
People can not tell how much the gold price will be,but it will be increased.There are many factors to make the gold price move to high point.
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Great post, after reading this post i also feel that gold is strong and invetment in gold is the safe one.
In fact,the gold is keeping going strong.