AppId is over the quota This year has seen higher gold prices just as the bears
were beginning to say told you so . Gold prices have increased by $175. How much
higher can they go or, rather, how much higher will they go? Precious metal
prices have surmounted much quicker than most other investment markets. For
there to be a growing tendency, new buyers must exist to uphold the impetus,
although precious metals appear in position to consider that sort of push from
an array of originators. It would have to be monetary policy that would invoke
the most change for increased precious metal investment demand. The central
banks of the world have uncompromisingly launched an inconceivable policy of
monetization since the 2008 global economic crisis. Even though they are
perceived as appropriate policies to fuel the global economy, these techniques
can also inflate it. Consequently, we're looking at a sum of about 10 trillion
dollars that has been fabricated because of these actions and the global economy
hasn't rebounded the way they would have liked. The markets' reaction to
this sum of easily printed money is really great for precious metals. Just as
when metals drew some support to tempt more consumers subsequent to the Federal
Reserve's meeting last week. Ben Bernanke made it clear that low interest
rates would remain at least for another two years. Furthermore, there could even
be another printing press run. Because of this, gold gained $68 for the week as
well as all precious metals receiving a boost overall. The financial community
perceives the Federal Reserve's monetary policies as convenient and conducive
for higher commodity values which, of course, include precious metals. The news
has stimulated investors to return to commodities. But, at the same time, low
interest rates also affect the US dollar relative to other currency exchange
rates. Commodity prices gain from a debilitated dollar, also constituting a
precarious climate within the markets. This goes for all assets that gain from
the security of greater yields. Additionally, the economy within the United
States is actually demonstrating something better than negative zero lately. The
GNP growth in last year's 4th quarter was to be moving at 2.8% which is the
highest since mid-2010. Even the housing sector is allegedly getting a tad
better. The jobless data has shifted slightly to the positive side with the
presidential election campaign around the corner. Maybe things will not blow up
so soon. The Eurozone predicament appears to be lessening and the range of the
crisis has reaped support from reports that Spain and Italy just might have some
new bond customers. Before this article culminates, we must save some space for
China. We already know that for the Lunar New Year the Chinese give gifts of
gold . But these gifts can not account alone for the existing increase in
China's gold buying. We can't say anything with conviction because China
does not publicize any of its gold trade data so it makes it a little tricky to
know their exact numbers. Yet, the numbers are rising because of the Hong Kong
released gold figures which evidence China is importing quite a bit from them.
Hong Kong Merchandise Trade Statistics, Domestic Exports and Re-exports: •
November 2011 China imported 102,779 kilograms of gold from Hong Kong •
October 2011 China imported 86,299 kilograms of gold from Hong Kong As the
Federal Reserve try their best (as they only know how) to stabilize the economy,
the manner in which they are proceeding will have as a consequence increased
inflation which will, obviously, higher the cost of raw materials. The economy
is still weak with a lot more that needs to be done. The fear of an economic
collapse is very real as the demand for gold as a store of value rises. We are
at a point where the environment is very ripe for the gold price as well as all
precious metals. This entry was posted on Friday, February 10th, 2012 at 10:55
am and is filed under Gold Price. You can follow any responses to this entry
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