What Will Gold Do in 2011?
If we could read a crystal ball or see into the future, we might be able to answer the question posed by Alix Steel in a recent article in The Street, "where will gold prices go in 2011?".
Sadly, we neither have a crystal ball nor can we see into the future. So where does that leave us?
We know that gold prices have risen an astonishing 400% over the last ten years, with a remarkable 26% gain in 2010 alone. To get an idea of where gold prices might go in 2011, we have to ask ourselves the question, "what moves the price of gold?".
There are many factors that contribute to the upward movement of gold, one main factor for buying gold is an investment as a hedge against financial disaster. Other reasons can be
- to diversity one's portfolio
- as a long term investment
- as a safe way to hold or convert 'paper' money
The conflicts in Egypt and elsewhere in January drove down the price of gold by about 6% with a return to more solid growth in February. Some say the rising cost of food, gas, overall inflation, riots, world conflict, US unemployment, etc should also add to a strong gold market.
Further to this, Alix says, "But these factors, for now, have stopped moving the needle. Instead investment interest, which gold desperately needs to break the curse of its triple top, has waned."
With the US economy in the situation it's in and the world conflicts that seem to be ever increasing, while we can't definitely say gold will continue to rise, it would seem to some to be a safe investment with a good, long term track record.
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