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.
