Showing posts with label gold futures. Show all posts
Showing posts with label gold futures. Show all posts

Tuesday, May 17, 2011

Why have gold prices risen so much?

Which ever way you view it gold prices are still rising. Rising debt, falling monetary value, default, war, weak housing, stumbling markets and rising interest rates.

These are the current situations that proliferate at the moment.

It can be argued that the current gold price rise started in 1971, when President Richard Nixon took the United States off the Gold Standard. 

At that time Nixon realized foreign countries were hoarding more gold and silver-backed currency than could actually be redeemed by the precious metal's reserves that America held
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Gold could be traded again and in 1971 gold prices were fixed at $42.22 per ounce but by February 1972, moved to $48.26

From there a steady rise would ensue to levels 17 times greater than this initial trading price. On January 21, 1980, the gold spot price reached $850 an ounce.

With interest rates rising some 10 percentage points in 8 years, we learn the correlation between the rises in gold prices was a compounded 33% for every rise of just one point in interest but during the same period

Stocks rose a mere 1%.

With all the crop of current Monetary, debt, war, weak housing and economy problems gold prices are going to be an attractive proposition for medium to long term investors.

It is even possible that gold will become the most sought after hedge available.

Tuesday, April 26, 2011

Gold jumps to record high price on fears of US dollar tumble

Goldandsilverhallmarks.com

Gold jumps to new record price as dollar falls further

Analysts believe the price of gold is going to go even higher.

The price of gold has hit a new record high, caused by a weaker US dollar and the continuing problems in the Middle East and North Africa.

Spot gold rose to $1,513.70 (£917.60) an ounce during early trading in Asia, before retreating.

Investors buy precious metals as a safe investment to guard against inflation and recent geopolitical turmoil. These are somtimes known as a "hedge" or safe funds.

Dealers say gold could even trade as high as $1,520 an ounce.

A weak US dollar is generally asociated  with higher gold prices, as both are seen as safe investments.

Monday was the seventh consecutive trading session that saw the price of gold rise.

"It's the dollar play," said a Singapore-based dealer. "There is more room for prices to go even higher."

On Wednesday, the chairman of the US Federal Reserve, Ben Bernanke, is expected to affirm the commitment of America's central bank to quantitative easing, a programme to flood money markets with liquidity.

That also tends to drive down the value of the dollar.

Analysts say the prospect of low interest rates in the US is causing investors seeking better returns towards buying gold.

Investors continue to react nervously to the uncertainty in the Middle East. An escalation in violence in Yemen and Syria over the weekend has also helped the price of gold strengthen.

Gold is not the only precious metal enjoying a rally, as silver is also on the rise.

Spot silver, sometimes called the poor man's gold, hit $47.88 an ounce, the highest price since 1980.