THE PRICE OF GOLD

The Current Price Of Gold

It is simple to see the current price of gold by looking at the kitco.com gold chart below.  This is updated daily to reflect the prices as they are issued by the London Bullion Market Association twice daily. 

The Future Of Gold Prices

There is much discussion going on right now as to the direction gold prices will be going in the coming year and in the next few years.

It seems there are two conflicting opinions, with experts on both sides giving conflicting predictions.  Some say that gold prices will maintain or drop, while the other side say that the future holds massive increases.  But which one is right?

The simple answer is that no one, and I mean no one, really knows.  It is impossible to predict the future.  The best we can do is look at the competing arguments and try pull the facts from the rhetoric and assumptions.

The Case For Prices Staying The Same Or Dropping

This scenario is where gold prices are seen as reflecting the global economic health and, specifically what is happening in the USA and western Europe.  The arguments goes like this: - the economy is growing and will continue to improve for the major countries.  This growth will likely come with increased inflation and increased interest rates.  This means that investors will return to the stock market, moving assets away from holding large quantities of gold (and other precious metals) which they will sell.  This selling of gold will outstrip the rising cost of production and world wide demand and therefore cause prices to remain approximately where they are or drop.

But does this argument hold any truth?  Well, stock markets have been gaining significantly in the first quarter of 2013 which means money is moving into the markets - and part of this is probably from the sales of gold.  The other side to the coin is that we are also seeing financial meltdowns in European countries and no one seems to be sure what the major banks in England, Germany and Switzerland and going to do with their gold reserves.

Add to this that China has been aggressively keeping growth low and India (one of the biggest consumers of gold) showing huge fluctuations in their demands - and it is hard to make a concrete argument for static or dropping prices.

The Case For Increases In Gold Prices

I am seeing some experts predicting prices between $5000 and $25000 an ounce by the year 2015.  This sounds like some sort of madness, but could they be right?

If you watch the videos below, they will explain why this may come to pass because of hyperinflation and economic troubles.

James Turk's Outlook for Gold for 2013 to 2015

Here is Nick Barisheff or the Bullion Management Group predicting the doubling of prices.

Should We Buy Or Should We Sell Or Should We Do Nothing

For me, the answer is simple.  Do not make any major purchases or sales until there is more information.

We need to look at all the financial indicators, from all the major players, at the consumption rates of all the major players, the costs of production and, in particular,  what positions the major gold investors are taking.

This will give all of us a better understanding of what the future holds.

What Are You Going To Do?