Current price of Gold

 

 

 

The underlying reason why the price of gold will continue to rise.

 

If you have been following the price of gold during 2009 you will have seen a dramatic rise in prices, followed by a significant dip towards the end of the year.

 

And if you look more closely at the year, week by week, you will see the usual rises and falls in prices -- in response to trading activity, the strength or weakness of the U.S. dollar, trader sentiment, geopolitical events and more.

 

Look at price movements day by day, or even hour by hour, and the picture becomes more and more complex and confusing. And it becomes almost impossible to answer the simple question: will the price of gold continue to rise?

 

We believe it will, but not for the usual reasons – like the underlying weakness of the dollar.

 

To see the big picture, and see further into the future, you need to get your nose out of the graphs and the inevitable ups and downs in prices, and look at gold from a distance.

 

The underlying reason why gold prices have been steadily growing is that people around the world are feeling uncertain, nervous and fearful.

 

It’s the fear factor that is driving prices up.

 

The last decade has shaken us to the core. Starting with 9/11 and closing with a recession which came close to being a great depression, the last ten years have been filled with uncertainty. The optimism of the 90’s is far behind us.

 

There have been too many disasters, too many wars, too many bankruptcies on Wall Street and Main Street. Too many jobs have been lost and homes foreclosed.

 

We just don’t know any more.

 

That uncertainty and fear is what drives the price of gold up.

 

And we are not just talking about individuals buying the occasional gold coin. Governments around the world are buying more gold. Investment managers are buying more gold.

 

As for next year and the years after, do we feel any more confident? No.

The future is uncertain and people remain both cautious and nervous.

 

That is why the price of gold will continue to rise. It will have its ups and downs, but the trend will be upwards until such a time – if it ever comes – when we can all heave a collective sigh of relief and see a sunny future ahead.

Gold is and always has been the most certain money available to us. It is real and tangible. We can hold it in our hands. And when we do so we are holding real money, not just the promise of money – as is the case with bank notes and share certificates.

 

Ignore the short-term fluctuations in gold prices. Fear is what drives the prices up, and until that fear passes, gold will always be a good buy.