Gold Coin Prices Headed Towards Record Highs In 2012?
December 13, 2011 – 2011 has been an exciting year for gold investors as the precious metal’s spot price hit an all-time record-high price of $1923 per ounce on September 7th. Although gold prices have cooled off a bit, currently in the $1,700 per ounce range, it’s no surprise that savvy investors continue to purchase gold coins in order to profit and preserve their wealth throughout 2012. Will gold coins reach record-high prices in 2012? What will drive gold coin prices in 2012? Here’s a brief explanation of three major influencing factors:
Inflation and the US Dollar – After the United States Government pumped trillions of dollars into its economy in the form of stimulus and quantitative easing packages, there’s no doubt that inflation could significantly deteriorate the purchasing power of the US Dollar in 2012. Inflation devalues dollars, but boosts gold’s value because the precious metal is seen as an effective inflation hedge. Think about it like this; between 1913 and 2011, the US Dollar lost over 95% of its purchasing power as a result of inflation while gold increased in value over 7,500%.
Global debt crisis – The United States isn’t the only one in a debt crisis, Europe and Asia are facing serious problems of their own as their economies continue to weaken with no sign of strengthening in the near future. Gold prices will be dependent on the state of the global debt crisis because nations looking to prevent economic collapse will purchase large amounts of gold to back their weakening currencies.
Safe-haven demand – When everything hits the fan, investors, banks and governments purchase gold as their ultimate safe-haven weapon because the precious metal has a long-standing history of wealth preservation. The more safe-haven demand that arises, the higher gold prices will climb in 2012.
Until next time.
Arthur McGuire
Senior Staff Writer - Gold-Coin.com
