Gold Price Bloomberg

Gold and inflation

Holmes says there are several reasons for not just one. He believes that all other commodities have gone through inflation adjusted prices of 1980 except for Gold and Silver. So gold is more of a monetary asset, and its money around the world. Gold performs well both on inflation or deflation.

Thomas Winmill of the Midas Fund, one of the most profitable precious metals funds believes the gold could see $ 1,500 within the next 12-18 months. The fund managers have identified five factors that will drive gold prices higher.

1. The decrease dollar.
2. More inflation in the future.
3. Investors seek greater safety in gold.
4. The high oil prices.
5. Gold should follow other commodities.

In a March 3, 2008 article entitled "Gold Beats financial assets as investors seek refuge." Bloomberg reported that "Gold, silver, platinum and palladium may be the best – performing financial assets this year as inflation and slow growth erode the value of major world currencies, bonds and stocks. "" Gold … can gain at least 24% this year as Federal Reserve Chairman Ben Bernanke S priority reduce interest rates for the control of consumer prices. "

The long-term outlook for the dollar are lower highs and lows low. However, gold bullion is the opposite, higher highs and higher lows. Gold is in a bull market because its fundamentals are so outstanding.

The gold price is driven by supply and demand. Each year the world's gold mines produce only 2,500 metric tons of gold. Best estimates are that the whole planet buys 4000 – 5000 tonnes of gold per year. Therefore it is very clear that the demand exceeds supply by 60% to 100% annually creating structural shortage situation.

Also the banks are no longer selling enough gold to offset the demand above the global amount of gold mined each year.

The billionaire financier George Soros was starting to buy gold again. Mr. Sorso has been a household name in gold. In April gold was the lowest in 10 years when it bought 10% of Newmont Mining Corporation from Sir James Goldsmith. In May, gold prices shot up to $ 880 an ounce in two days. Analysts have said the big push in gold has been triggered by rumors that Mr. Soros was changing his investment mix possibly shifting the gold weakening bond market as signs of a strengthening economy have raised renewed concerns about inflation in the U.S..

The key is that in times of crisis and fear gold rises and individual governments can not stop. During most times predictable governments are able to maintain control and keep a veil over the price of gold. This causes gold to move in a "staggered" pattern. Historically, gold bullion has been immune from inflation since gold is one of the few investments that is both an advantage and at the same time, the responsibility of another person

About the Author

South African born Keith has lived in the south of England for most of his life. After graduating from University with a degree in Business Information Systems Management he decided to start Strawberrysoup; a website design company based in West Sussex and Dorset.
Keith successfully gained entry into the Southampton University Air Squadron and spent over 12 months training to fly. Since then he has continued to follow his interest in flying and has now began his own training in the form of a Private Pilot’s Licence.
Keith also spent 13 months working within the Image and Printing Group at Hewlett Packard in Bracknell. Throughout his time there, he was responsible for many activities including events organisation and website design and maintenance.

Stock Market Crash – Robert Prechter on Bloomberg – Oct. 19, 2007