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What Drives Gold Price & Is There an Alternative to Buying Gold?

We have seen the price of silver and gold go up consistently to levels which are now considered historic highs. Taking a close look at the price of these commodities just last year, you’ll notice the amount of gains that an investor who invested in them at those times made, cumulating them to recent levels. We have seen gold price go above $1,700 an ounce and silver has gone beyond $28 an ounce. When you look at the historic charts and compare where they use to be, you’ll note the remarkable return in investment.

The market feels that there’s a possibility that the global financial crisis would gain traction and we’ll see stuffs get back to normal, hence the prolong consolidation we are experiencing. What we discovered in the commodities market is more than that. We have seen a mashing up of all these factors contributing to gold’s current levels.

What would happen to the price of gold going forward?

Industry watchers are constantly looking at the price of gold as it stands right now and they are analyzing the possibility of it rising or falling. Investors are focused on trying to make money off the price actions of gold. Technically, investors look at gold chart to determine the direction of this precious metal, thereby resulting into more and profits for the investor. Investors should be aware that they are not the major indices in the gold market.

We find a lot of Asians these days with a considerable amount of disposable income, for the first time these groups of individuals are likely to save some of their income. These funds are in the form of disposal income which can amount to around 40% of their total income. There’s a great possibility that as Asian giants like China begin to experience more growth in its middle class, we’ll begin to witness more people making deposits in the bank in gold forms. A lot of savers feel more secure making gold deposits.

In the gold market, the presence of prospects generator firms can affect the price of the precious metal. What these prospect generator firms do is that they go into the fields and carry out prospecting and drilling. Once they acquire a good site, they relinquish them to partners who would in turn drill for the metal. Although, all stakes in the company are not totally transferred to the partners.

 

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