2012 Gold Value Projection

gold_vs_stock_chart_2011With the economy still in a state of recovery, there is much speculation as to how the price of gold will fare in 2012. A  recent article in Money News.com predicts that gold will remain a solid choice for investors looking to expand and diversify their portfolios, and here’s why:

  • Gold is in demand in China and India. The Eastern world is in a state of prosperity, and more people in those markets are purchasing gold as a status symbol and hedge against inflation.
  • Europe is facing an unprecedented debt crisis. The recent economic troubles are not unique to North America. Europe is experiencing a critical debt crisis. As any savvy investor knows, when the global economy suffers, gold’s value rises.

Banks are buying gold. According to the World Gold Council, “central bank gold buying soared 470% in 2011.” (insert chart central bank holding buying 1 in folder precious metals news)The whole world is trying to protect itself from debt and inflation by investing in gold.

  • Demand is higher than supply. The economic recession has everyone scrambling for gold for its stability and value growth potential.  Gold and silver are finite resources; however mining of precious metals has decreased in recent years.
  • Gold prices are positively affected by geopolitical instability.  Gold is well known among investment experts as a recession-proof investment, as it tends to increase in value when geopolitical climates around the world become unstable.  One example is how gold prices will be affected by the worsening relations between Israel and Iran.  As world events continue to unfold, gold and silver have always been solid investments, and they have performed exceptionally well in recent years.  2012 looks to be yet another great year for the precious metals market.
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