Price forecast for gold: upward pressure intact although near-term signs of exhaustion are visible

What impact will the global economic and political crises have on the gold market?

Gold is a commodity that has seen immense price fluctuations over the past few years. The price of gold rose rapidly during 2008 and 2009 amid fears for a potential financial crash, but declined substantially in 2011. Although this trend shows signs of reversing in recent months, there are significant signs of exhaustion from current levels. In this article, we will take an objective look at how much more upside potential sits ahead for gold.

I will mainly focus on a section where it says:

“Gold is generally seen as one of nature’s best defenses against economic crises, but there are no guarantees that gold will keep its value during an economic crisis. This is because in times of financial distress, people get scared and they flock towards gold which acts as a store of value in times of hunger, war or political turmoil.”

1) The phrase ‘majority of people see it’ should be changed to ‘the majority of people see it’.

2) The phrase ‘as a store of value’ was not corrected by Google Translate. It should read as ‘as a store of value’.

Is gold really a store of value?

Many people believe that gold is a good store of value and that it is unlikely to face any major negative event over the next few years. However, we all have to be aware that no asset has guaranteed properties, especially one as volatile as gold. That being said, even if you plan on holding gold over the next few years, it should be done with an understanding of what you are doing and why.

“Price forecast for gold”:

As a store of value, gold has a lot to be desired. Firstly, it is volatile as its price can go up or down at any given time. Secondly, its price is very much affected by global events like wars and political unrest. In times of such events where gold usually goes up in price and where the world economy is involved to some extent, the price of gold may stagnate for an extended period of time. This does not mean that the asset should not be bought or sold but it would be wise to do so only with an understanding of the investment rationale behind it.