2012 Gold Value Projection

With the economy still in a state of shaky recovery, there is much speculation as to how the price of gold will fare in 2012. A recent article in Money News predicts that gold will remain a solid choice for investors looking to expand and diversify their portfolios, and here’s why:

1. Gold is in demand in China and India. The Eastern world is in a state of prosperity, and more people in those areas are purchasing gold as a status symbol and to hedge against inflation.

2. Europe is facing an unprecedented debt crisis. The recent economic troubles are not unique to North America. Europe is experiencing a critical debt crisis. As any wise investor knows, when the national global economy suffers, gold’s value rises.

3. Central Banks are buying gold. According to the World Gold Council, “central bank gold buying soared 470% in 2011.” The whole world is trying to protect itself from debt and inflation by investing in gold.

4. Demand is higher than supply. The economic recession and slow recovery has everyone scrambling for gold for its stability and value growth potential. Gold and silver are finite resources, however, and mining of precious metals has decreased in recent years.

5. Gold prices are positively affected by geopolitical instability. Gold is well known among investment experts as a recession-proof investment, as it tends to increase in value when the world’s political climate gets dicey. One factor in particular that may affect gold prices is worsening relations between Israel and Iran.

600 years of Gold Value

Gold and silver are always solid investments, but gold and silver they have performed exceptionally well in recent years. 2012 looks to be yet another great year for the precious metals market.