August 22, 2012

In the Last 4 Years Gold Price has Gone up by 89%. Are We Set for Another 4 Years of Gold Appreciation?

“On the day of China’s auspicious [Olympic] opening ceremonies on August 8, 2008, gold was $857.80 an ounce” resource expert Frank Holmes begins.

“By the time the world watched the opening ceremonies of the 2012 London Summer Olympic Games” he continues, “the precious metal had climbed to $1,617.90 an ounce. This represents a remarkable increase of 89 percent in four years.”

Now we find ourselves wondering, whether the appreciation of gold will remain as strong and the price will continue to rise, or whether it will take a break now and stay on the present $1600 level? Or even go down?

Let us refer to the experts' opinion.
According to World Gold Council, the global demnd in the second Quarter of 2012 was 990,o tonnes, which is by 7% lower compared to the second quarter of last year (2011). The dip in demand is mainly explained by the exceptioanlly strong demand last year, as well as by the challenging global economic climate in general. From this point of view, gold's "behavior" did not come as a surprice, it acted in line with the expectations as a "liquid" store of valu.

In terms of value gold demand is rather stable: US$51.2 billion in Q2 2012 versus US$51.6 billion in Q2 2011. During the quarter, the average price of gold was US$1609.49 per ounce, 7% higher than the average for Q2 2011.

The majority of field experts do not see any dramatic changes in the gold demand trends in the several years to come. Which means that their answer to the first question is “Yes. We set for another four years of gold appreciation.”

In Gold we Trust!

GBULLION team

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