10 Reasons Why the Gold Price Will Rise Rapidly

Predicted Gold Price 2012

Many investors are starting to realise how the debt crisis in the euro zone is spilling over and affecting the U.S. and many other countries now. The bailouts are not working, and that is getting more people talking about gold and silver in the last several months. No matter how bleak the world looks, historically if you look back, gold and silver has always done particularly well during recessions and depressions. This is more proof and giving gold even more of a catalyst for prices to continue higher in the coming years.

There is a real shift in dynamics that has given strength to gold since 2008. With the negative interest rate environment the purchasing power of many currencies and risk of defaults keeps pushing gold to new highs without looking back.

Gold (inflation-adjusted) is still off about $500 - $600 compared to the prices back in 1980. The Chinese have realized the true power of gold for many centuries and with all the warnings around about an economic collapse developing have been hording gold over the last few years. Land and real estate in China is not doing well right now, but wealthier tycoons that have been offsetting their property investments with gold, silver and other commodities.Article Source: http://EzineArticles.com/6944647

Gold Price Market Overview and Gold Mining Stock Option - Diversify Investment Portfolio With Gold

The dollar has gained strength this year due, in part, to the minimized potential for another round of qualitative easing in the U.S. Federal Reserve Chairman, Benjamin Bernanke, released comments that did not imply support for another round of quantitative easing in the U.S. The dollar value notched higher almost immediately versus a basket of other global currencies, and this action can often diminish the number of investors positioning with gold and silver. Since precious metals are often used as a hedge against a weaker dollar, prices for precious metals often suffer as the dollar gains strength. One can often observe precious metal gold and silver prices increase when other global currencies, like the euro, gain strength. The debt resolution and financial restructuring plan that positioned Greece to secure billions in bailout funding is an example of action that helped to support the euro which positively affected precious metal gold and silver prices. The euro gained strength and more investors positioned with gold and silver on a global scale. Gold receives attention as a way to diversify an investment portfolio and there are numerous ways to initiate the diversification process.Article Source: http://EzineArticles.com/6933316

10 Reasons Why the Gold Price Will Rise Rapidly

1. Selling of Gold by the Gold Cartel - the Gold cartel is made up of the US Government and a collection of bullion and central banks. Central banks have long been sources of gold bullion used to manipulate the market and suppress the price of gold - but they are running out. Gold has been sold in such large quantities to control the price, there is not sufficient production to reverse, or even slow down the depletion of gold bullion stocks. The only way of slowing down demand is to let the price rise. However hard they try to manipulate the market, classic supply and demand will win.

2. Shortage of Supply - the current economic conditions combined with the increase in production costs have slowed down gold exploration and production. In addition, the infrastructural problems of South Africa have significantly effected their output.

3. Transfer of Gold Depositories - Hong Kong has recently completed a high tech security vault at the city Airport. The Hong Kong Authorities are, as we speak, transferring its gold holdings from London to its new secure depository. A move like this sends a message - we will be accumulating gold, and we want it safely stored where we can see and control it, where we can access it instantly, and where its out of harms way.

4. Increasing war and social unrest - war and social insurrection can escalate rapidly. The world is already engaged in more conflict than at any time since the second world war. The Chinese are long term thinkers and are undoubtedly taking this in to account as they accumulate gold and silver to store it close to home.

5. China is adding to its gold reserves - China is making no secret of the fact that it intends to increase its gold reserves, and now holds in excess of 1050 metric tons.

6. China is encouraging its citizens to buy gold - with the world's largest population, and one of the fastest growing economies China has made it legal for their citizens to buy gold and silver, and are actively encouraging them to invest in these precious metals.

7. India, which has been the largest buyer of gold until now, is expected to continue purchasing for jewelery, and increasingly for investment. India already eats up the bulk of the annual mine output, leaving limited quantity for ever competing and ever larger demand.

8. GLD, the SPDR Gold Trust buys gold to back its shares. - They are currently supposed to hold over 1000 tons of gold (almost the same quantity.as China). If this is indeed the case, Their demand on gold output is a major push on the gold price. There is more on this subject in our Gold Report

9. Inflation vs. deflation - the argument persists. After a deflationary period, the billions of dollars being pumped in to the markets will become inflationary. Inflation causes gold to rise. When gold last peaked at $887 in 1980, inflation was averaging 14% and peaked at over 20%. Mortgages had risen in excess of 17%. This could happen again.

10. Paper currency devaluation - the steep decline of the dollar has effected the rise in the gold price, but currencies will at some stage be competing against each other for devaluation. All currencies become unreliable, they no longer provide security, and gold becomes the new money. When this stage is reached we've gone full circle, the bulk of assets will be owned by Asian interests and the new world order will prevail.

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