Last year Gold price went up by almost 25% to close at USD 1,096 per Tory oz. it was headlines last year. Really it is no surprise but what about silver, platinum or even copper? Fact is that silver and platinum, they both outperform gold in 2009. Sliver shot up by 49% in 2009 and platinum rose 56%. So that was the trend in 2009!
Was it a supply issue that causes the increase in gold price? About 60% of gold comes from the mines and 28% from recycling, and the balance 12% is from sales by central banks (latest was India who join the bang-wagon of owing a 1000 ton of gold and above).
Predicting gold price is let look into the future and it will not be easy, the question is will it continue to go up? It fell from a peak of close to USD 800/tory oz in the early 80’s and for the next twenty years or so, it was sideways. By 2005 it kept its uptrend till now. In all fairness investment should be seen as a diversification, the next question is this – is it at a peak now and should we wait for the “huge-correction” before we take a position on gold! Will central banks in the near future be net sellers of gold thus triggering a sell-off?
My views are limited on this but the experts out there are looking at a support level of USD 1,000/tory oz for those who believe that the upside potential is greater than the risk of a huge sell off by the current net buyers - the central banks.
Till then Kong Xi Fatt Cai to those who celebrate the Chinese Luna New Year!
Tj
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