Gold Futures Symbol
Gold Looking Strong With A Bright Future
Gold is currently in a major bull market. Recently it pushed through the $1,000 per ounce level. The demand for Gold has a tendency to increase from September through the end of the year. Jewelry accounts for over 70% of Gold consumption each year. Typically, over half of the jewelry purchased each year is directly tied to the Christmas shopping season. Jewelry fabricators usually begin purchasing Gold bullion in either August or September.
Even though Gold is currently near record levels, this is not adjusted for inflation. Once you take inflation into consideration, Gold would need to be over $2,000 per ounce to actually set a new price record. I believe the price of Gold has a good chance of hitting $2,000 or more in the next few years and here are some of the reasons why.
1. We are currently in a commodities secular bull market which has at least 5 years to go. Usually the biggest price gains are made in the latter stages of a secular bull market. Gold is a commodity.
2. Gold is a safe-haven type of investment and has maintained its value throughout the ages. With the uncertainties facing the U.S. and the world, this bodes well for the price of Gold.
3. The U.S. Dollar is looking very weak. Technically and fundamentally it has major problems which are not going away anytime soon.
4. Inflation looks to be a major issue. The government is printing money at an incredible rate and increasing the money supply. This in itself will cause major inflation down the road.
5. Supply and demand issues. A majority of the supply of Gold in the market for some time now has come from sales conducted by global central banks. Recently these sales have slowed greatly which indicates to me the supply is getting low.
6. World demand is increasing, especially in emerging market economies such as India. Investors in general are beginning to see Gold as an investment class to allocate some of their funds. The largest Gold exchange traded fund, StreetTracks Gold Trust (symbol GLD), is now one of the largest ETF’s in the U.S. only 4 years after its inception.
7. Last, but certainly not least, there is a major wild card that could send the price of Gold into the stratosphere. If China would decide to even partially switch from owning U.S. Treasuries to owning Gold in its place, there is no telling how high the price of Gold could go.
Nobody knows for sure what will happen to the price of Gold in the future. There are many factors strongly favoring more upside price movement. Gold, like any other item that is traded, will have its price corrections every once in a while. Trading or investing is all about putting as many factors in your favor as possible before taking a position in the market. The second part of the trading equation is sound money management. Always cut your losses short. I believe Gold has a good chance of doubling its price or more in the next few years. I will be monitoring Gold stocks and exchange traded funds for exact entry points to achieve maximum profit in this Gold bull market.
About the Author
Gary E Kerkow is Chief Investment Strategist for Tradingmarkets4u.com. Over 20 years of trading experience including stocks, futures, exchange traded funds and options. He implements the strategies, methods, techniques, principles and psychology of the world’s best traders and investors. This includes Jesse Livermore, William J O’Neil and others. Visit my website at http://www.tradingmarkets4u.com
Futures and Speculation Clarification
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