Gold close to an All Time High Once More

It is good news for those who are interested in buying gold coins for the price of gold is on the rise again; this time closing on an all-time high. Its price has been steadily rising over 10 consecutive years and it is expected to continue to rise this year.

With the gold price at more than $1,400/oz, it is quite close to a previous high of $1,421/oz.
Though gold price may fluctuate, its recent performance is indicative of long-term prospects investment.

US Dollar weaker

The performance of gold rises steadily due to the many disappointing US economic news figures; the weakened dollar has been hurt by global statements that the U.S. currency is not as attractive or ‘appetizing’ as before.

The US dollar has been, and currently is, the world’s reserve currency but gold tends to counter its prominence all the time. Gold has set itself to be the world’s currency major competitor and it is often referred to as the only real money.

China has surpassed Japan’s economy recently to take second spot with massive reserves in foreign currencies. China's reserves over the years were built on the US dollar but now a turnaround spells bad news for the greenback.

That in turn benefits gold as its price tends to move in opposite direction of the greenback. Gold owners are the major beneficiaries in this course of event. But it is not just the dollar’s decline that has buoyed the price of gold; there are other factors affecting the US economy.

High Unemployment

The increased unemployment rate in the US is now around 10%, despite the large stimulus package announced by the US government. This rate has become the country’s highest in a long time. The financial markets are concerned over this figure which does not augur well for the economy, since much of the country’s work force is sitting idle. With persistent unemployment occurring, analysts are starting to call the situation ‘depression’. Hence people are driven towards gold, the safer haven.

The troubled real estate market also caused the gold price to rise. Real estate is traditionally regarded as an alternative to stocks and bonds which are paper assets, and a cover against inflation.

Ailing Real Estate

However, even the real estate market performed badly over the past two years; many Americans lost big bucks in real estate instead of having shelter from alternative assets. Their wealth fizzled out in the financial crisis caused by the recent subprime mortgage fiasco that rocked the stock market. Now, everyone stands alert to a paradigm shift when it comes to real estate and stocks.

It is not true anymore that real estate is independent of the stock market as both environments declined with the same factors. Hence, more people are turning to gold, especially gold coins. These are more affordable, convenient, portable and readily liquid.

Financial markets will remain a concern with Americans seeking solace and safety with the uncertain U.S. economy. Gold prices are expected to climb in such situations.