, IncMany economists and analysts are growing concerned that a dreaded double-dip recession could occur if governments pull back on the stimulus measures that have been used to keep many national economies afloat. This and the worsening monetary issues have to potential to strongly influence gold prices in the months ahead.
The world fiscal structure has largely been kept afloat by governments pumping billions of dollars into their economies. As countries like Greece, Dubai and others try to come to grips with the enormous strain this is putting on their treasuries, they could be tempted to pull the funding and actually cause a double-dip recession.
How would such a situation affect gold prices? While no one can offer iron-clad proof, all indications point to a strong rise in spot prices. Recessionary pressures have a severe weakening effect on currency, meaning that it generally takes more of a weak currency to buy gold than a strong one, resulting in a price increase. For this reason, futures prices have started to rise and some economists are predicting gold prices could challenge the $2,000 per ounce barrier before the end of 2010.
All of this bad news offers two strong aspects for gold investors. With bullion and certified coins poised to increase in price, now is an excellent time to invest. Gold purchases can be seen as one way to offset the weakening of the dollar and the fiscal unrest in a number of countries. In addition, gold provides a hedge against the instability that surrounds times like these. During the current world economic crisis, gold prices have risen nearly 20% over the past two years as investors seek to protect their financial futures.
Gold prices have the potential to greatly profit from the current fiscal problems. Investors can watch the economic decisions of countries around the world and monitor gold prices for the right time to invest in bullion and certified gold coins.
Ronald Stevens
Senior Staff Writer - GoldPrice.net
