, IncAnalyzing the trends in the price of gold bullion can help people decide where the entrance and exit points lie for investments. If the bottom of a correction can be predicted, the investor knows when to buy. If the top of a run can be accurately forecast, the investor knows when to sell. Prices have peaks and valleys, and learning to understand them makes it easier to determine what is going to happen to the price of gold.
From the end of February to early April in 2009, the price of gold bullion fell 10.5%. The drop wasn’t alarming, rather a correction to the bull market that has been occurring. From April to December, the price soared from $895 to $1,226, an impressive 37% increase in just eight months. This surge followed a correction to put the price of gold bullion at an all-time high.
In the first two weeks of December, gold dropped from its all-time high down to $1,096, which represented another correction of about 10%. While each pattern has its own characteristics, if another 30% climb occurred it would run gold to a new high of $1,425 or an increase of nearly $330.
When analyzing the price of gold bullion, there are no guarantees, but there are signs that can indicates the potential for change. Current economic conditions are helpful indicators that gold could continue to rise throughout 2010. A weak dollar, continued unemployment woes and a flood of money into an overloaded financial structure serve as indicators that point positively in gold’s favor. The December 2009 sell-off is also positive; after hitting its all-time high, gold adjusted but then began climbing again. This could be an indication that the fall in December was only an adjustment, not a change in the direction of the trend.
With economic signs and the investment market both moving in gold’s favor, analyzing trends in the price of gold bullion would seem to show that 2010 will be a profitable year for investors. While analysis only gives a glimpse into the future, that peek looks like it could be a good time to invest in gold.
Ronald Stevens
Senior Staff Writer - GoldPrice.net
