Who Benefits From A Fall In Gold Bullion Prices?

With gold bullion prices hanging strong at the same level for almost six weeks, we have every indication to expect a very exciting summer for investors, as the world of economy keeps going round and round, and the gold market will soon follow suit.

The current price formation is unprecedented, at least in the last five years. To a smaller extent and with a wider volatility, prices have reached a plateau only on four occasions within the five-year period.

From late November to early December 2010, gold prices were moving around the $1,400 per ounce mark, and what followed was a crazy rally that pushed gold to its all-time record prices in October 2011. Moving up and down the $1,600 an ounce area in July 2012, gold prices then leapt to the $1,800 an ounce area, making 2012 a very good year for gold investors. Finally, two small plateaus on either side of the $1,400 per ounce area last June and December lead on both accounts to steep descends below the critical $1,200 an ounce threshold.

Technical analysis had clearly recorded signs of the upcoming congestion as highs were progressively lower and lows were getting higher until the market lost its momentum. It is difficult to say who or what will trigger the release of the market’s built up energy, and it is now anybody’s guess what direction the market will take; what we all do know and understand is that there is too much happening in world economy for the gold market to ignore.

Gold bullion price prognoses  

As it is customary, a number of financial analysts published their forecasts at the beginning of the year, at a time when gold was valued at around $1,200 an ounce. Expected prices for an ounce of the yellow metal ranged from below $1,000 per ounce to over $2,000, most analysts backing up their theory one way or another.

We are now almost halfway through the year and, all things considered, gold will most probably be moving in the foreseeable future within the $1,200 an ounce solid support mark and the $1,400 strong resistance point.

Interestingly however, Goldman Sachs Group, a leading investment management firm, recently reiterated its view that gold is expected to close the year at $1,050 an ounce, based on the growth of US economy: at this point, this sounds like wishful thinking.

The US government would very much like to see lower gold prices as the dollar would then seem more attractive. China, India and Russia would jump at the opportunity as cheaper prices would help the Chinese and the Russians build up their gold reserves and support their currency. At the same time all three countries and many others, together with large trading funds, will not miss the chance to buy cheaper gold for jewellery or to make a profit buying low and selling high by exploiting small investors’ fears as they did last year.

See every downward movement of prices as a buying opportunity, and trust coininvest.com to offer you the best deals in the market.