What Are the Gold Price Changes?
Against a background of the world inflation, durable devaluation of the American dollar and record oil prices growth the cost of gold reached another record level on the world market, which was more than $900 per ounce. And this precious metal prices have increased on 32% in 2007.
Moreover analysts are sure that the USA economy recession will urge the further gold price growth. But the other variant of the events development is also possible, and the analysts add that with a range of some factors a downward tendency can appear.
Such a swift gold market growth was caused by geopolitics and finance instability, which has been dominating at the world markets since august 2007. “As far as credit crisis is a bank crisis as the matter of fact it created perfect conditions to gold prices growthâ€, - supposes the consultation company VM Group analytic Matthew Turner.
Ad interim the USA Fed tried to fight with subprime credits crisis: it reduced the rate on 100 base points less than half a year before to prevent recession. But the Goldman Sachs investment bank analysts are sure that the USA economy won’t manage to avoid recession before it begins to rehabilitate after the crisis, reports Reuters.
The Merrill Lynch economists give more pessimistic prognoses. In their opinion the fact that unemployment level has increased on 0.3% and reached a record of 5% last year indicates that the entire recession has appeared in the USA and it happened in the end of the last year. “But recession is a positive factor for the gold market. The thing is that the USA economic growth slowdown will continue to reduce dollar and that will promote gold prices growth next 6-12 monthsâ€, - says the Merrill Lynch strategist Daniel Haines.
At the moment the situation happened on foreign exchange market is good for gold market. Dollar has sagged to the record low point with respect to euro and Swiss franc. And if Fed lows refinancing rate on 50 base points by the end of the month (as investors predict) it will lead to further American currency sag. In connection with that many experts are sure that gold price will reach a new record – 1000 dollars per ounce in the nearest future. “And even if recession doesn’t begin in the USA, economic indexes will remain rather distant, and that will promote the further gold prices growth “, - says the leading Capital Economics economist Julian Jason.
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