2008 Gold Prices to Soar
Monday, January 21st, 2008Bought any 999 gold coins yet ? Looks like prices is set to soar in 2008. If you stay in Puchong, buy them from UOB Puchong
Reasons Why Gold Will Rise in 2008
1980 High
On January 21, 1980, gold closed at $825.50. Today, it takes $2,200.00 to buy what $825.50 bought in January 1980. Therefore, gold still has a long way to go before it reaches and surpasses its all-time high.
1. The Dollar Slide
Over the past five years, the dollar has lost 50% of its value versus the euro. Large institutions and central banks are moving their dollar-based assets into non-dollar-based assets. This is coming at a time when the U.S. economy is slowing to a crawl. In order to stop the U.S. economy from slipping into a recession, the Federal Reserve has no choice but to reduce interest rates in order to stimulate the economy. As rates decrease, the dollar collapses. As the dollar falls, investors are moving their dollar-based assets into assets such as gold – increasing demand and pushing the price even higher.
2. Flight to Quality
The sub-prime mortgage crisis was the catalyst that pushed gold to 28-year highs, and now we’re seeing investors make a flight to quality as fundamentals are supporting strong prices. In 2007, gold produced a return just below 30% while the S&P 500 increased less than 8%. The uncertainty in the U.S. stock market, stemming from the sub-prime crisis, has caused investors to move their assets into stable assets. These assets, such as gold, have provided portfolios with much needed protection and, at the same time, have increased the value of portfolios at a rate of 4 to 1 over the stock market during the past few years.



















