Following Wednesday's announcement by the Federal Reserve that interest rates would likely stay near zero in the coming two years, the price of gold surge to its highest price in four months.
In 2010 some analysts thought John Embry's forecast of the 2012 gold price, which placed the yellow metal between $1,500 and $2,000 an ounce, was too optimistic. Now it seems that Embry may have undershot the mark.
The price of gold could increase above a range of $2000 per troy ounce even by the end of the year. Some analysts and observers believe fluctuations in gold prices could drive the gold market in coming weeks as traders struggle to find general consensus and global policymakers consider increasingly desperate measures to stabilize wide spread economic concern.
Gold was on track to touch record highs on Friday, as anxiety over debt concerns in both the US and the Eurozone boosted the metal's safe haven appeal.
The recent volatility in the precious metals markets has the gold bulls and bears jostling to make their case for the price of gold going forward.
The price of gold remained generally flat Tuesday, up $1.70 to close at $1428.80 per ounce. However, the trend for increasing prices should be supported by rising inflation numbers surrounding sustained high oil prices.
Gold fell more than $33 per ounce on the day as investors look for liquidity to raise capital in light of the Japanese disaster. The increasing fears of a full nuclear meltdown and the crash of the Japanese markets which lost 14 percent on the day, have attributed to investors seeking safe heaven currencies.
Are investors gaining confidence in the economy by taking their money out of gold, or is the lowered gold price a correction in a continuing upward trend?
Gold futures fell for the first time this week as investors sold off their positions ahead of the year’s end. The metal reached a record $1,432.50 an ounce on Dec. 7 and is headed for a 10th consecutive annual gain.
Gold prices spent the week in range-bound territory amid thin volume and year-end adjustments to investor portfolios.
Friday, January 27, 2012