Gold Price Is Already At $2400 When You Adjust The Dollar For Inflation From 1980

April 19, 2011 - PRLog -- While the Fed is forced to tighten up interest rates, stocks will take the impact of slowing economic actions. Nevertheless, we do not anticipate the Fed to have the ability to tighten to the level that actual interest rates rise, i.e. bank interest pays much more than the rate of inflation, simply because this could trigger the federal government to default on its debts as well as further harm the shaky housing marketplace. When it comes to an atmosphere of negative actual interest rates, gold ought to continue to rise. Visit http://silver-dollar-values.com for a lot more silver and gold ideas.

The second main driving cash demand will be the explosive growth of Asian markets. Traditionally, particular cultures, like in India and China, have preferred gold and silver as equally a display as well as a store of wealth. As wealth has been accumulated quickly in these countries, their own demand for gold has increased significantly. Additionally, their central banks as well as those of other nations, like Russia, also have been enormous buyers of gold in recent months. This trend is really a continued bullish signal for precious metals irrespective of how the US markets perform.

How may these two elements ultimately benefit the gold price and silver price? There's a growing conclusion that recent economic expansion has been financed by massive Federal Reserve subsidies. It has built up bullish momentum within the metals marketplace that ought to continue until actual interest rates turn positive. As well as if interest rates do improve (which might be a negative for metals) costs of existing U.S. Treasuries will fall. Traders selling at a loss might turn to precious metals as an alternative safe haven. Visit http://silver-dollar-values.com for a lot more silver and gold ideas.

In the mean time, essential international interest rates are already rising, such as in such key economies as China, Australia and within the EU. These moves ought to channel the inflationary influence of QE and artificially low U.S. interest rates back into the dollar, thus exerting upward pressure on the dollar costs of precious metals.

Nevertheless, what might be the single greatest upward cost pressure will be the growing fear of a debt crisis resulting in a currency collapse. It's essential to recognize that, at $1,470 an ounce, the gold price stands at only some 61 percent of the present value of its 1980 all-time high of $850, which, modified for inflation, is some $2,400 an ounce. Granted the frail state of the US economy these days, the chance of a nearby collapse is a lot greater than in 1980, when America was the world's largest creditor - rather than its largest debtor.

Consequently, it appears that, regardless of some volatility, the cost of precious metals like gold and silver may very well be set for a continued rise, and also the stock marketplace for a steep fall. Certainly, if inflation materializes at rates comparable to those of 1980, a gold price above $2,400 looks extremely feasible. Should it be supported by increased fears of a debt crisis along with a threat of collapse within the US dollar, far greater prices might be in store, perhaps you will be looking at $5,000 gold soon. Today is still an extremely great time to purchase gold and silver prior to the prices rise drastically to meet demands. Visit http://silver-dollar-values.com for a lot more silver and gold ideas.

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