Gold Spot Price Expected To Rise Much Further
Investors in gold and the other main precious metals have plenty to celebrate after the US Congress approved the long awaited deal on Tuesday. The agreement is a temporary fix to prevent the US economy from falling off the “fiscal cliff” into deep recession. The instant reaction from the financial markets caused a global rally today (Wednesday Jan 2) with commodities increasing sharply while government bonds and the US Dollar fell, as expected.
The weakening US Dollar causes commodities priced in USD to increase because they are effectively made cheaper for holders of other foreign currencies. If gold can close above the existing resistance level of $1685 then we are likely to see more widespread speculation pushing the price of gold in excess of $1720 per ounce. At this moment (1:15pm ET) spot gold price is up to $1688 and expected to rise further before the close.
All four main precious metals are on the increase today as an effect of the weakening US Dollar. Besides gold heading towards $1,700 per ounce, palladium is up to $708 and platinum has increased more than $30 per ounce so far today. Historically, the price of precious metals and especially gold has had large increases when the economy is in turmoil, unemployment increasing and the US Dollar is declining against other world currencies.
Silver prices are expected to go “off the charts” during this year for two major reasons. There is likely to be further weakening of the US Dollar because of the continuing economic problems which are not going away anytime soon. Also, the huge rift between the supply and demand for silver continues to become wider. The demand for silver by investors and by industry far exceeds the amount of silver being mined. As the momentum increases further during 2013 it is expected that the price for silver will go crazy as the basic rules of supply and demand take over.
Investments in gold and other precious metals have yielded good profits during 2012 with all four main metals increasing significantly. It is easy to predict that precious metal investments will continue to increase in value during 2013 but it is difficult to forecast which of the main four will increase the most. Many investors are choosing to leave the majority of their existing investments in gold and diversifying their portfolio by making new investments in silver, platinum and palladium.
Only five years ago gold was less than $600 per ounce and has increased more than 275% since then. Although nobody can give a solid guarantee that gold prices will continue increasing at this rate, most investment experts are convinced that they actually will. A lot of reputable and highly regarded investment specialists are predicting that gold is likely to achieve well over $2,000 per ounce during the course of 2013.