My friend recently came and asked me what do i think of gold???Can the price keep moving higher???That’s something that been playing in a lot of commodities trader’s mind of late.My answer was simple.Yes and No.In any investment the only thing that are certain ,risk and reward.But of course we should never leave the decision making to fate.It is never the case of head you buy tail we sell,in investing.There are few past experiences that we can reevaluate in order to predict what shall we do to make sure the decision that we arrived at are the well informed decisions.
People all over the world buy gold for various reasons.Be it for hedging purposes,as a safe heaven investment or merely speculating.But bear in mind that in holding gold ,we are not getting any interest on it,as compared to holding to other type of investments.In 1973-1975,gold prices tripled.1978-1980 gold prices went from $150 to peak at $850.So what exactly made the prices move the way they did at that time???It happened mainly because the interest rate fall to a low level ,and it couldnt keep up with the inflation.As long as this situation exist we can say based on the past experiences,gold price tend to move higher.Of course there are other factors to move the price,but i guess the correlation between interest rate and inflation is the major factor.
So,…….can the gold price move higher???
