In 2010, Gold prices are looking to have their tenth year in a row of positive gains. In June 2010, the price of gold hit new all-time records. There are many different reasons on why to be bullish that the positive trend for gold will continue in the future.
The fear of inflation remains one of the top concerns among many investors. Adding to the fears of inflation is the massive US debt that is continuing to build. The estimates for 2010 show the US budget deficit to be more than $1.5 trillion. With the current monetary policies left unchecked, there are predictions that within 10 years the debt could reach $18.5 trillion or more. Inflationary measures are now possibilities to support debt reduction in the future. This may not be what investors in the stock market want to hear though for those who own gold it has potential gains as gold is considered a hedge against inflation.
Another reason to buy gold is the overall economic doubt. There are serious doubts on when their will be an economic recovery. The US jobs reports have shown no signs of recovery which has led to an increase in unemployment over 2009. New policies of quantitative easing may be used to enhance a sluggish economy though in the increase in money supply most likely leads to devaluation in the US dollar though an increase in the value of gold.
Another reason why now might be the right time for gold is pure demand. For the first time since 1980, the demand for gold in form of gold coins and bars has exceeded that of gold jewelry. This is according to Anglo Gold Ashanti one of the leading gold producers in the world. Back in 1980 it was excessively high interest rates that drove the increase demand in gold. The new global demand for gold is estimated to almost 820 metric tons.
With the increase in demand comes an increase in the pressures to supply that demand. The continual increases in prices and demand of gold can have even more positive appreciation to its value. In the last 10 years as gold in the form of gold bullion has increased the production from gold mines across the world has been decreasing. The goal by gold mining companies is to increase production though there is not guarantee to how fast this can happen.
Gold looks to have a promising future over the next few years with inflation fears, current economic global crises, and the ever increase demand for gold.
If you choose to add gold to your portfolio there are different options to choose from. Gold stocks called ETF’s, gold bullion, and numismatic gold to name a few. Only gold bullion and numismatic gold are physical gold which is considered the best way to own gold. When experts talk about gold as a hedge against inflation they are referring to physical gold.
To greater understand the benefits and differences of numismatic gold coins and gold bullion it is best to contact one of our account executive who can review your current financial goals and the can share the advantages of owning gold.