Although we have reached new highs in 2011, I still believe that we are well away from where we should be; I would expect a lot of buying from China and Central Banks world wide through out 2012, coupled with the ongoing fiscal problems that are not going to be resolved any time soon, with the high possibility of further quantative easing by the ECB and the Federal Reserve, let’s not forget Iran, I predict the following prices.
I would target between $2250.00 – $2500.00 (If we see further easing we could reach $2700)
Gold is a quintessential risk management tool which is primarily used to help build a strong foundation for a diversified portfolio. As the original currency, investors often move into this asset in times of uncertainty, this behaviour is known as the “flight to safety”.
Gold bullion is having a renaissance in the current economic climate as it is an asset that reacts positively to US Dollar weakness, inflation and volatility in equities. Also, the Gold trade is subject to some periods of stronger physical demand, namely the Indian Wedding Season, Diwali and Christmas which make for some strong seasonal trends to trade on.
Gold offers a degree of stability in times of turbulent markets & economic uncertainty & these are certainly such times at the moment . Anything that offers even a degree of stability in these very difficult times is viewed to be a positive investment if only to preserve ones wealth .
In the current scenario Gold is one of the few investments that not only protects wealth , but actually increases it & at the very least preserves purchasing power if all the inflationary moves being made by Governments start to unfold.
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