Gold has had a great run for the last 11 years, no one can argue that.  From $252 per ounce in August of 1999 to $1,421 on the last day of trading in 2010, that is a gain of over 463%.  Gold is arguably the best performing asset of the last decade and that is why so many are buying gold coins.  But where are we headed from here?  Experts will say that past performance is no guarantee of future results even if we wish they were.  For the most accurate picture we must turn to the fundamentals.

Many analysts seem to agree on one thing for 2011, and that is gold is going higher.  But why?  The primary forces behind gold’s rise as of late have been concerns of inflation, a weaker dollar and the global economic crisis, in conjunction with higher investment demand.  Some people are buying gold on concern and others are buying on a desire to capitalize on the growth that gold has provided over the last decade.

Here are some comments from experts in financial markets:

Li Ning, analyst with China International Futures in Shanghai, told Bloomberg, “Gold’s rally will continue next year as inflation pressures continue to build and currencies remain weak. The global economy is recovering, but we’re not completely out of the woods, and gold’s safe-haven status will increase investment demand.”

Anne Laure Tremblay, precious metals strategist at BNP Paribas told Reuters, “The gold price remains well supported by a weaker dollar and solid investment demand. We expect the gold price rally to continue into 2011 on the back of strong fundamentals, including inflationary pressures (notably in China), ample liquidity and concerns about the value of the dollar.”

Buying gold as a financial insurance policy by investors, central banks and institutional buyers alike is likely to continue through 2011 and beyond, and is causing expert gold estimates to reach up to as high as $2,000 per ounce for this year.

The main trend to watch here is the generational bull market that we are currently experiencing in gold.  We have yet to hit the third phase of this bull market and when we do I fully expect to see prices skyrocket before ultimately correcting.  The third phase will be marked by the general public buying into gold in a big way. You will hear your neighbors, friends, relatives, waiters, clerks etc. talking about their gold investments everywhere you go.  It will create gold prices rising without much correction to the downside.