Last week the staff at Healthy Financial Habits was certain that the price of gold would begin to fall and show signs of a temporary leveling. On Tuesday we received news that the United States economy grew 2.8% in the third quarter, less than what analysts expected. We also heard from the Federal Reserve last week giving indication that interest rates will remain low. These two announcements had a tremendous effect on the price of gold.

Each day the price of gold ratcheted up, closing at  $1192.80 on Thursday. Then of Friday we heard big news from Dubai. Dubai announced on Friday that they are having debt problems and can not guarantee all payment.

After this news was released the dollar index DYX increased and some investors began to sell off gold as they anticipated a drop in value. Gold reached a high of $1196.90 an ounce last week before plummeting over $20 an ounce, eventually closing at $1174.20 on Friday.

As the price of gold moves higher every week any news causes will cause investors to buy or sell at a moments notice. Right now it is uncertain exactly what the effects of Dubai’s debt problem will have on the global economy and the price of gold more specifically.

Because of the volatility in the global market gold prices could move in either direction as we learn of news from Dubai. With this being said, we believe that with no major news gold will drop off slightly during the first part of this week and eventually level off closing around $1165 an ounce by Friday.

So far this year gold has been up 33% and 13% this month alone. Many analysts predict that the price of gold will top out at $2,000 before we see a decline.

Check back with Healthy Financial Habits every Monday morning for your weekly gold price predictions. Here you will find current news, information and investment strategies that will assist you in making financial decisions. It is important to remember that consulting with a quality financial advisor is always recommended prior to making personal financial decisions.

Author: Greg Jackson