Gold Prices Continuing To Rise - $2000 Mark In Sight
In reaction to the on-going European debt crisis, and weak economic data in the United States, gold continues to rise, nearing the $1600 per ounce mark. Forecasters believe that gold will exceed $2000 per ounce before the end of the year due to sluggish forecasts for the world wide economy.
Gold prices continued to rise sharply when Federal Reserve Chairman Ben Bernanke went before Congress and implied that the Reserve bank was considering further monetary easing (QE3) to help stop deflation.
Considered to be the default currency, gold continues to react to the unstable conditions on both sides of the Atlantic Ocean.
One of the largest forces driving the price of gold is U.S. monetary policy. Events such as a potential downgrade by Moody’s of the American credit rating, the possibility of further easing by the Federal Reserve, and the inability of the U.S. government to solve the debt limit problem has caused investors to flee to gold. The price of gold often reflects the value of the dollar, however they are usually at different ends of the spectrum. When the dollar drops, gold will always rise.
The U.S. dollar continues to slump due to many factors. High unemployment and low manufacturing statistics are showing signs of a double-dip recession. Failures throughout all of Europe to control escalating debts have pushed gold even higher.
Investors are looking for a safe haven right now, and gold ETF’s and jewelry seems to be their safest bet.
Gold has risen over 600% in the last decade. Rob McEwen, CEO of U.S.Gold Corp. believes that gold will exceed $5000 per ounce before this cycle is broken. How long this will take, he does not know, but he sees it reaching this level in the near future.
Mining companies are finding it harder to keep up with the demands for the precious metal. Smaller mines are quickly being purchased by larger corporations, and investors are turning to high-end jewelry and coins as additional investment options.
Ongoing problems in the financial markets of the European Union, including possible defaults in Greece, Ireland, Portugal and Spain, and now a possible default in Italy, gold will remain a good investment for a long time. Economic conditions in the United States will be carefully watched. If there is any indication of monetary easing, poor manufacturing data, or an increase in unemployment again, you can expect to see gold soar.
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