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Smarter people than myself have tried, and failed, to accurately predict the value of gold over X number of years. I’m not going to put forth a very narrow prediction like “Gold will be exactly $2000 at this time in 2010”, but I can tell you what a lot of the analysts out there are saying (this way, if they’re wrong, I can go “Well that’s just how I heard it!”).

First, though, I’ll point out a few things that have analysts leaning towards a certain prediction…

First, investment demand is on its way towards trumping jewellery demand. This is definitely worth noting, as jewellery and industry have traditionally outweighed investors when it comes to buying up gold.

Second, at the beginning of the decade, when gold was low, we saw a lot of banks selling off their gold stock. Today, we see banks buying up gold.

And third, mine production has fallen off a bit over the last few years.

Some analysts are saying we should see gold at $2,000 or more within a couple of years.

Now as I said, I don’t like to make such narrow predictions. Analysts always put a little disclaimer on their predictions, like “I don’t have a crystal ball, but it seems like…”

So I won’t say “Yes, gold will hit $2,000 in 2010”, I’ll just say gold is definitely seeing a good year in 2008, and it’s probably going to see a few more good years.

But of course, even if I’m dead wrong, there’s always 2011, and 2012, and 2013 and so on. Honestly, I don’t like to look at the short term too much. Gold is more of a long term investment, and while it can be fun to check up on these daily updates and end of the year predictions, the fact is that gold pays off over time. 2008 wasn’t the first good year for gold, and it won’t be the last.

Right now is a good time to have a stock of gold. In general, a gold investor can expect moderate increases and decreases, always leaning towards a substantial increase on their initial investment, but last month saw an unprecedented jump in gold prices.

In one day, on September 17^th, gold jumped up about seventy bucks to $847.30 an ounce in New York. That’s an 8.9% boost. To put that in perspective, if you had invested just one hundred bucks in gold on the beginning of that day, you’d be nine bucks ahead when the day closed.

But wait: Gold kept rising after New York closed. In London that day, Gold slipped just a bit at the beginning of the day, before jumping to $893 after a 14% boost in less than twenty four hours.

At the end of the day, we had a number of analysts declaring it the biggest boost since 1980, and others declaring it the biggest boost in gold ever. For reference, gold had a nice, if short lived, peak of $2,000 in 1980.

Silver had a good day on the 17^th, too, going up by about ten percent.

The jump actually came as a surprise to nobody, of course. Gold always rises when people get worried about the economy. The great thing about gold really is that it’s fairly predictable. When you invest in stock, you’re never 100% sure you’re betting on the right horse. With gold, you always have a pretty good idea of where the market’s going, and even if you’re wrong, there’s certainly no gold market crash on the horizon.

Although, to be honest, while these big one-day jumps get me in a good mood, the real pay off with gold is years down the line. The whole point of investing in gold is to protect yourself from the messiness of the current global economy.