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July 29, 2009 – Earlier in the year, many gold investment projections had forecasted a powerful year for the precious metal as many wise American investors could continue turning to safe haven assets in order to protect their hard-earned wealth during the worst financial crisis the United States has seen since the Great Depression. Several of these gold investment projections spoke about the spot price climbing above and beyond its all-time record high of $1033 per ounce, potentially climbing up to $1250-$1500 per ounce if conditions were right. Unfortunately, economic conditions have changed drastically after the United States Government and Treasury pumped trillions of dollars into our economy in order to prevent a large-scale loss of confidence with the dollar, stock, bond and real estate markets. This has caused many investors to believe that an “economic recovery” is underway, thus reducing the safe haven demand for precious metals and increasing the risk-taking demand for stocks and bonds. The higher risk-taking demand has shifted gold investment projections because short-term economic conditions may not be ideal for significantly higher spot prices, yet it’s the long-term conditions that really count…

According to several market analysts, our nation’s latest overprinting of dollars is only feeding the long-term inflationary beast that is slowly but surely growing in our economy, and this has been proven by our latest Producer Price Index and Consumer Price Index. Once the Federal Reserve says that our economy has “recovered” from this financial crisis, they will increase interest rates, thus creating an excellent breeding ground for skyrocketing inflation. Fortunately, this inflation could lead the way for more bullish gold investment projections and significantly higher spot prices.

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Arthur McGuire

Senior Staff Writer - Gold-Investment.info