What is going to happen with gold prices in 2011? There are some people who are predicting that gold will start to shrink in value due to a late 2010 trend of gold dropping in price. However, this concept is rather far-fetched and is quite literally “wishful thinking.” If the U.S. economy improves drastically, then the price of gold will drop in value. If there is significant progress made in mining and production and more gold becomes available, then the gold price will decrease.
Some analysts are now predicting a major jump in price for 2011. Among the big names touting gold’s rise in 2011 are financial commentator Jim Rogers ($2,000) as well as PricewaterhouseCoopers PwC) who stated that it will peak at $1,500. Meanwhile, Goldman Sachs took an in between stance, stating that gold will peak at $1,750 per ounce, though it may take it over one year to reach that new pinnacle.
If these predictions are something close to the truth, then gold will steadily approach the value of platinum. Goldman Sachs also predicted that 2011 will have less impressive gains when compared to 2012. However, they also believe that in 2012 and in the future, the gold price will once again go back down, as more investors will realize it’s not a bankable long-term strategy, merely a “compelling trade.” Naturally, Goldman Sachs in convinced that the U.S. economy will pick up in 2012 and real interest rates will rise.
What are some other forecasts being made about gold prices in the year 2011? Hedging will remain unpopular, and more companies will hold derivatives or forward sales contracts in order to lock down gold prices. There will also be greater efforts made towards organic brownfield exploration.
So there you have it. The year 2012 promises to be very interesting. You have what is sure to be a cantankerous presidential campaign, as well as the Mayan predicted “end of the world.” In the background of all of this will be gold—the one true standard of human wealth. The bottom line is that having huge reserves of gold can’t hurt you.
You, as the investor, are actually encouraged to continue investing your funds in a variety of avenues, leaving about 10% of your total assets in gold, silver, and other precious metals. Don’t get carried away. Gold prices are stable but they are not a replacement for income. Unless of course, you manage to collect gold coins that appreciate in value!