Gold has already touched $1000 an ounce and predictions are that it will go higher. There are several factors which are increasing the demand for gold and thereby increasing its value. Big financial institutions and private wealth managers are hedging against the current economic downturn and hoarding gold. Gold has proven to a safe asset with a price which is true to its value. Basically an ounce of gold will cost the same (maybe even more) even if the value of currency goes down.
Although gold has increased tremendously in the last one year, there is a lot of scope for it going further higher up. The current bear market is going to last for at least the next 3-5 years, so gold has this time to stabilize and move further up. Because of the bear market, many assets will loose value which will even more fuel the demand for gold which is a physical asset. Unless there are stable currencies, this demand for gold is bound to increase. This is the right time to buy gold.
Monday, March 2, 2009
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