If you are into making gold price predictions, then right now is a very good time. Over the course of the last few decades, there have been good times to get on the gold train and there have been decidedly bad times.
Being able to spot low points and make accurate predictions about the price of gold is one of those skills that will serve investors well. Going forward from this point, it appears that the price of gold is set to do nothing but rise. After posting huge gains over the last decade, we can confidently guess that gold is not quite done yet.
The price of gold as a function of American economic strength
As an investment device, gold has always been something of a guarantor against failure in the United States economy. That has meant that when the economy was good, the price of gold would sink. When perception of the economy became poor, the price of gold would rise once again.
Through the economic crisis, the one positive for investors has been the movement of gold, which has continued to eclipse price points that were previously thought as unattainable. So what is gold set to do in the next few years?
What’s your take on the economy’s direction?
This is the big question that prospective gold investors have to ask themselves. It’s all about market direction and where you think the economy is going. Though this is a highly simplistic way to break down the future of gold and an overly elementary way of making gold price predictions, it serves as a fairly effective baseline.
If you speculate that the economy is going to continue to sink or lag behind over the next couple of years, then you probably also think that the price of gold is headed upward. If you think that reports of America’s economic downfall are overblown, then you’d probably expect the price to drop.
Acting on those urges
Today’s investors are using those gold price predictions to decide on their strategy going forward. You would not want to hold gold if the economy was going to make a massive recovery, as its price would dip significantly.
Likewise, people who think that the economy is going to stumble even more over the next few months are loading up on gold coins, the occasional gold ETF, gold stocks, and even gold bars. They want to own as much gold as possible, since their gold price predictions indicate that there is a lot of money to be made with these investments.
The other factors driving predictions
Simple confidence in the American economy isn’t the only thing driving the gold price, though it is a primary contributor. The demand for gold remains an important part of the equation, and the movement with the gold mining market remains important, too. How these companies interact with each other to gain market share has an impact on what the spot price of gold does.
Additionally, global factors tend to impact price predictions, and will continue to do so as long as the world’s economy is so intertwined, whether you’re looking for stock investments, exchange traded fund investments or physical metal investments.