Investors Continue to Show Confidence in Gold as Price Increases to $1664

The bullish trend in gold appears to be continuing although Bernanke’s optimistic outlook for the U.S. economy did put a damper on the prices of the yellow metal earlier. According to reports from Bloomberg, gold backed exchange traded products are very popular right now among investors. After more than a decade of price increase, gold is still going strong enough for analysts to predict that the upward movement will continue for now.

The Fate of Quantitative Easing

The U.S. economy is showing positive statistics after a long wait. The employment figures are up as of now and this has given cause for analysts to believe that the economy is finally breaking free of the debilitating effects of the recession. However, there is some speculation in the markets that the Fed could still bring in quantitative easing. This would result in devaluing the dollar.

The market always moves towards gold and other strong stores of value when currencies devalue and this is bound to be case in coming weeks too, feel some analysts. At the Deutsche Bank, analysts go so far as to label the U.S. dollar as the main risk for the price of the precious metal for now.

Oil as a Reason for Bullish Gold

The rising price of oil and the uncertainty in this market segment can be another reason why investors are choosing to ignore dire predictions made last week about a possible plunge in gold prices.  As the U.S. continues to back Israel against Iran and the simmering discontent in this part of the world continues to spark vociferous debates and side taking, there is no saying whether war will break out or not.

Meanwhile, investors appear to be safeguarding themselves against a military maneuver by either side by moving into gold right now when the political situation remains just short of explosive.

Uncertainties in Economies Boost Gold Prospects

The ongoing uncertainty in Eurozone even though the Greece debt swap has largely succeeded is another reason why investors are staying cautious about cash backed assets. After all, any serious set back here will also adversely affect world economies to some degree, great or small. While waiting for the European countries to regain their footing, investors are stocking up on gold which has performed consistently all through the recent years.

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