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Is the future of gold bright?

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In the past few years of world economic crisis the price of gold has hit some record heights and traders want to find out if the trend would continue. Big companies like HSBC have already released forecasts for the price of gold in 2013 that say the price would continue to rise.

Understanding what drives the price of gold

Speaking about the behavior of the price of gold analysts argue if inflation or deflation pushes the price up. Generally speaking higher prices of goods and services or higher inflation makes gold prices rise. There are analysts who claim that the price goes up because other investments do not prove profitable, which is not related to inflation, but rather to a declining industrial growth. A real economic growth must be present in order for a solution to the current crisis to be found. In order for banks to keep things stable the price of gold should continue rising. In the past years gold has ouperformed a number of other assets.

Expectations for 2013

As quoted in media, HSBC forecasts that the price of gold will range between USD 1,550 and USD 2,000 per oz in 2013. This will be backed by monetary easing by banks, as the experts say. It is expected that this would also cause the US dollar to lose some strenght. HSBC also expect that central banks will continue to have a high demand for gold.

When trading with gold investors should not forget that there are a great number of factors that affect the price of the yellow metal. These include not only interest rates, economic recovery, or the balance reports by central banks, but also factors like the number of weddings in India.

Disclaimer: The article is written for informative purposes only and it is not financial advice. The author does not have any position in the currency pairs mentioned, and no plans to initiate a position. He wrote the article himself and expressed his own opinions. He has no business nor personal relationships with any mentioned government entities or stocks. Readers should not treat any opinion expressed by the author as a specific inducement to make a particular trade or follow a particular strategy, but only as an expression of his opinion.

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