This time last week Healthy Financial Habits reported that gold reached an all time high when it broke $1077 an ounce. Gold is back in the news once again this week. This time it has climbed to over $1,100 per ounce yesterday breaking yet another record.
As faith in the US currency weakens the price of gold increases. Another recent contributing factor to the rise in gold prices comes from India’s acquisition of 200 metric tons of gold from the international monetary fund last week at a cost of $6.7 billion dollars. When investors see this it creates a higher demand for gold.
Gold has been in the spot light for several years now as it stretches off the charts. Just over 10 years ago you could purchase an ounce of gold for $252.80. Today it has nearly quadrupled on value and as the economy weakens the price of gold is not expected to drop off anytime soon.
Analyst from around the world can agree that gold prices are not even close to topping out. Jim Rogers, chairman of Singapore based Rogers Holdings believes that we should expect gold to reach at least $2,000 an ounce in the future. He bases this off of the historical high in 1980 adjusted to today dollar.
Ellison Chu from the standard bank of Asia believes that the value of gold will maintain in the four digit range due to a steady increase in demand for the shining metal. Chu believes that India’s purchase last week will have a psychological effect on investor. The purchase of 200 metric tons leads investors to believe that other central banks will follow.
Purchasing gold now is an excellent way to hedge against inflation. Gold prices are on the rise and will continue to rise as the value of the dollar falls. I believe that right now is still a good time to purchase gold. As always you want to consult with your financial adviser before making any investment decisions.
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Author: Greg Jackson