Whats going on with the Gold Market

Due to concerns of negative real interest rates, global currency debasements, and overall strong fundamentals for the metal – analysts are forecasting gold to much higher prices. Citigroup, for example, believes gold will reach $2,400 an ounce in 2012 and $3,400 an ounce in the “coming years”.

Morgan Stanley says to remain in gold as an investment, even after Bernanke’s comments last week were interpreted as signaling less chance of QE3. Last week was believed to be profit taking predicated by news and media with no major change in fundamentals. Those fundamentals that give signals for higher prices remain intact with a long-term uptrend in the metal.

Central banks will buy 300 metric tons of gold this year, Royal Bank of Scotland Plc said. China, Russia and India have been the biggest buyers and Switzerland, France and the Netherlands the biggest sellers since the first European central bank gold agreement to limit sales.

The fundamentals of significant macroeconomic, systemic and monetary risk will support the precious metals. As will the increasingly risky geopolitical situation – the risk of which is not priced into markets just yet. Swiss money manager and long term bear Marc Faber, says precious metals and equities investments offer some safety to worldwide political conflict. The number of analysts predicting the price to cross $2,000/oz are increasing, insisting on the strong upside potential mainly due to quantitative easing (QE) measures by the US Federal Reserve and European Central Bank.

» Contact Cornerstone Asset Metals today to learn more about buying gold and silver as an investment.

Past performance is not an indication of future potential values.