Not only did the price of gold soar in 2009, but gold stocks (mining companies for example) and indexes gained upwards for 100%-200% over the past 52 weeks.

What is the Future for Gold Prices?

Are gold prices going to continue downwards, or will they reach $2,000 per ounce like some experts say? It depends on who you ask.

Many gold bulls say that the fundamentals are strong for even more record breaking gold prices in 2010. Some predict $1,400 an ounce, while others claim $2,000. In the most recent edition of Investor’s Digest of Canada, John Embry, Chief Investment Strategist at Sprott, wrote an article titled, “Expect gold to gain more than 30% this year.”

But gold had a bad month in January, losing 1.2%, and some say that trend will continue. Some call it a “gold bubble” which needs to implode eventually.

The stock market bubble in 2000 led governments to flood the financial system with liquidity to try and tame the collapse. But “easy-money” (low interest rates, printing more money) led to an even greater bubble for housing and credit, which collapsed during the past two years. The problem with “easy money” being used as a tool to fix these collapses becomes apparent when the purchasing power of “fiat” (paper) money erodes.

The gold price boom is a direct result of investors losing confidence in the integrity of these currencies, as well as obvious decline in their purchasing power. Gold has remained consistent over time for well over 5,000 years, and is considered a true safe haven from the unpredictability of paper money.

Source: GoldAlert.com

Gold Prices dropped 3% from the start of the week to end up $921 to close out the week. Many people are wondering why the price of gold has been so unpredictable, despite economic hardships where gold prices usually flourish.

But current trends show that the price of gold is only set to rise. Many experts are still predicting a 4-digit gold price this year. Expect 6 months of volatility though.

From MiningWeekly

The gold price is expected to continue to trade with a high level of volatility in the next six months, and could top the psychologically four-digit market for “extended” periods of time, Australian equity researcher Resource Capital Research (RCR) suggested in a report this week.

From BullionVault.com

Pointing to the volume of new money being pumped into the world economy by national governments and central banks, “I certainly think gold will get above the $1030 high that it hit last year,” he added.

Here is a good analysis of why gold prices are set to soar this year. The excessive printing of money to “correct” the economic crisis will only lead to inflation, devaluing the dollar and other world currencies.

Gold prices declined for 8 straight days in the past 2 weeks, but rose to a little over $940 an ounce after news was released saying that the unemployment rate in the United States soared to the highest level in over 25 years. Stock and metal prices dropped steadily because many investors are sitting on the side lines waiting for good investment opportunity. Also many investors had to sell off gold to cover losses from other investments.

But the bad news released says that US economy lost 2.5 million jobs over the past 4 months, which led investors to jump back into gold as a safe investment. Of course, some people are still predicting much higher prices for gold, as much as $1,200 in the next 12 months.

President Barack Obama signed his stimulus bill into law today, and the stock market took a nosedive. On the flip-side, the price of gold reached a 7-month high, trading at $967 per ounce for April futures. The price of gold has gone up 9.4 percent this year.

The price of gold typically goes up when there is fear in the economy, because it is seen as a safe investment. Many investors are concerned with the US Government’s ability to pull the country out of a recession, so they dump stocks and turn to gold as a hedge bet.

Some gold-pundits see gold reaching highs of $2,300 per ounce down the road.

Seasoned forecaster Dundee Wealth Inc chief economist Martin Murenbeeld and US Global Investors precious-metal-fund comanager Ralph Aldis both cite the exact same long-term $2 300/oz figure, Murenbeeld explaining that the $850/oz gold-price peak of January 2008 translates into a $2 300/oz peak in today’s money.

Sources:
AP
Mining Weekly

The price of gold hit historic highs earlier this year in March because of a looming economic crisis and panic. It appears that this panic is back, as the Fed has lowered interest rates to “jump start” the economy, but at the same time, lowering the value of the dollar.

Gold gained 9% last week, which was the highest one week advance in 3 months.

The dollar index, which tracks the value of the greenback against a basket of other major currencies, fell 0.8% on Tuesday. The greenback and dollar-denominated gold prices often move in the opposite direction.

Source: MarketWatch: Gold rises on weaker dollar ahead of Fed decision

Experts say that the low interest rates will hurt the dollar in the long run.

“If the Fed has to keep rates very low for a long time, that’s going to be awful for the dollar and very good for gold,” said Matt Zeman, a metals trader at LaSalle Futures Group.

Source: Gold rises on dollar’s weakness

There are few safe investments left, but gold remains an attractive investment. Gold settled at $882 an ounce on the New York Mercantile Exchange on Tuesday. This was after it jumped $33 to $866.20 an ounce on Monday.

Although the US dollar is gaining back some of its strength, it also fell on Tuesday. Combined with the stock market crash, it’s easy to see why everyone is flocking to gold.

Article Source: Gold prices climb amid financial uncertainty

If you’d like to invest in gold, take a look at Bullion Vault, the easiest way to buy gold bullion.

The good news is that you can sell your old gold and jewelry now and make some very good cash for very little work. The economy is still uncertain, and it looks like it won’t get any better soon. But nobody knows if it will get a little worse, or a lot worse. The worse the dollar gets, the higher the price of gold will go.

The bailout plan did not pass, which means in the long run the dollar should remain fairly consistent with what it is today for the time being. We’d love to see the price of gold go as high as possible, but not at the expense of a complete dollar collapse.