Last week we saw gold reach for the sky as it broke several records. The week ended with yet another all time record high when it finished at $1,116.70 an ounce. What directions will the price of gold head this week?

Last week was a great week for gold. Several factors such as India’s purchase of 200 metric tons of gold from the International Monetary Fund at the beginning of the month coupled a falling dollar has raised the interest of overseas central banks and individual investors.

As the value of the dollar falls it is expected that several overseas banks will continue to buy large quantities of gold. The dollar is measured against other currencies using the dollar index. As we see the dollar index fall, more interest is shifted towards the acquisition of gold.

With a strong opening this morning at $1131 an ounce, gold appears to be continuing last weeks upward trend. My prediction for the week of November 16^th is that gold will continue to remain strong and increase in value by perhaps as much as $20 an ounce. Given that the dollar has been on a sharp decline for the past 3 months and shows no sign of a turn around, I would say that this trend will continue this week. In addition many people foresee inflation coming and are looking for a hedge thereby causing a greater demand for gold.  As more individuals and central banks purchase gold this shortens the gold supply causing the price to increase.

While considering the purchase of gold it is important to remember that gold is not an actual investment per se. Gold is merely a hedge against inflation or a safe haven. Before making any decisions concerning your finances it is recommended that you consult a quality financial adviser.

Visit Healthy Financial Habits daily for up-to-date news and information on gold prices and other commodities. Here you will find all the information you need in order to guide you while making investment decisions.  Check back every Monday morning  for weekly gold price predictions.

Author: John Zinsky