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High Demand Equals High Gold Prices

There are two worlds that treasure gold, for two different reasons. The production of jewelry is the biggest source of the yellow metal demand. But not all of them represent a precious thing to wear. On one side, there is the Middle East and India. For the women there, gold is a wealth store. We think of retirement money, but those women see gold as their pension. As expected, the price of click here gold is significant and this target is sensitive to big changes.

The other side is the First World. Both Europeans and North Americans consider gold for adornment jewelry. This market covers wealthy customers that react less to price swings, unlike the investment buyers. But there is still a rational reaction to increases. World Gold Council showed that in the first half of 2010 the total demand of the yellow metal rose by 36%. Now we take a look back at the two worlds; the investment demand reports a rise of 118%.

Over the last decade, gold turned to be the best performing asset. But will the price continue to rise? Thirty years ago, the precious metal closed at US$850 an ounce. At today's dollar, the price should be US$2,358, to equal its nominal high from 1980. In September, the price was at US$1,250. One could say that the metal is, once again, acting as a safe haven during hard times. Gold shows its best gloss during inflation. But in deflationary times, there could be an opportunity for it, especially if you are looking for undervalued shares of gold companies.

There is a proved leverage to a higher gold price. It is no secret it consists of gold mining stocks. Gold juniors are the key in this new gold rush. The world's currencies might be trash, but the gold is definitely cash. Gold reserves are not forever, so producers need to replace them in a very competitive market. That is why juniors with safe yellow metal ounces in the ground will be most hunted.

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