The Outlook for Gold and Prices Per Ounce

What can you expect of gold prices per ounce in 2011 and 2012?  The rise of gold price has been nothing short of amazing, as it increased 400% since 2001.  Even from 2010, the price has increased 26%.  Gold set a new peak price in 2011 of $1,637.50 per troy ounce.  What determines the price of gold? 

There are many factors that can determine gold price, including issues related to supply and demand, as well as fluctuations in the market.  Gold is known as a store of value commodity, as well as a hedge commodity.  It can protect investors from the threat of inflation as well as currency dropout.  This past year, as economic troubles befell Ireland, Greece and the entire Eurozone, gold price drastically increased.

In fact, the only reason gold prices per ounce are down at the moment (as of September 29, 2011) is because of a short-term recovery by the American dollar.  Naturally, as Europe’s woes increase, the American dollar increases, as it represents stability in the marketplace.  All of this is second to gold, however. 

Then there is the issue of supply and demand.  Gold production is becoming scarce as demand slowly overtakes the mining of gold metal.  Another issue to be aware of is that of gold price and production “correction.”  Reportedly, SPDR Gold Shares now holds 1,263 tons of gold.  Additionally, some sources are predicting a 5% correction.  If this happens, then gold prices could be brought down to $1,550 PTO.  Rising interest rates are another factor.

Some sources are now predicting that gold could increase in price to $2,000 PTO.  On the other side are pundits who suggest that $1,600 is the “top of the bubble.”  Nevertheless, all of this speculation doesn’t take into account all of the debt being reported from countries, companies and investors.  Major financial scares always increase the price of gold, as the first thing consumers want to do in the event of a crisis is convert currency into precious metals and other protected assets.

What about you?  Is now the right time to start investing in gold?  When it comes to gold prices per ounce, remember that it’s not worth buying until the price is down—that is, if you want to see a profit.  Buy gold price when it hits a low and then build profit when it reaches a new bubble.  At the rate gold is going, it may only be a matter of time before gold eclipses platinum as the world’s most valuable precious metal.


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