|   |

Translate/Traduisez/Übersetzen Sie/Traduzca/Traduca/Traduza:

Author:
Andy Goldman

Until recently gold prices have been on a tear. After decades of going nowhere, gold has had a year of steadily rising prices, that is until two weeks ago. It appears the hedge fund investors who bid the price up, have decided to take their profits. Gold prices plunged and many financial analysts have proclaimed that the bull market in gold is over. Is it?

Price charts are one way to look at the situation, however we need to dig deeper into the fundamentals to see what the prospects are.

As the hedge fund investors have dumped gold, there is evidence new hands are coming into the market. As some investors leave, and new ones replace them, the volatility in gold prices will remain high. What we need to ask is are these new investors speculators or is there some fundamental reason new investors are coming into the market?

Lets start by looking at the retail investors. One important component of the price of gold is the retail investors in India, China and West Asia. Traditionally these investors have bought gold in the form of jewelry. Jewelry demand in these countries does have an impact on gold prices. The significant point here is investors in these countries are now accumulating gold in forms other then jewelry. In 2005 the investment demand for gold in these countries has risen from between 20% and 34%. The strong demand continues into the first quarter of 2006. During this same period of time, demand for gold related Exchange Traded Funds has risen 23%.

India is the largest buyer of gold in the world. Indian investors will soon be able to buy gold ETFs on Indian Exchanges. There is also a strong demand for investing in gold coins in India.

China has not had a strong interest in investing in gold for anything but jewelry. That may be about to change. The government is easing regulations that may encourage more investment in gold products.

Interest in gold investments is also increasing in Thailand. Demand for gold investments in that country has been hovering around 10%-15% until 2005. In the past year investment demand in Thailand has risen to 35% for gold.

The supply of gold remains tight. The demand across Asia is increasing. It is likely we will see supplies tighten even more which will again begin to drive up prices. The next wave up will look different. After having seen prices plunge, investors are likely to take profits much quicker this time around. Prices will begin to go up again, however there will be significant pullbacks as investors take profits.

Gold investments will also continue to be fueled by Energy price increases, increased inflation in the US and world tensions. Federal Reserve Chairman Ben Bernanke said that growth in the inflation rate could be worse than expected. After that remarkstocks in US markets dropped. This could bring investors back into gold.

Several financial experts in India are looking for gold to go to $770- $800 by the end of 2006 or beginning of 2007. Currently the price is around $635 an ounce. It is not clear if we are at the bottom prices yet. Prices will rise, but this ride will not be for those with weak stomachs.

Andrew Goldman is president of Metal Rabbit media services, the operator of http://www.Exchangetradedfundinvesting.com He has written a number of articles on finance and investment over the last ten years.

	Pure 999.9 7.6 grains Solid Gold 24K Fine Bullion Bar Current Price: $ 26.00 | (12 Bids) | | Sale Ends In: 8m 24s
	gold flake by the bag lot Bullion wear scrap melt xXX Current Price: $ 0.99 | (0 Bids) | | Sale Ends In: 11m 23s
	2002W American Eagle Gold Bullion Coin 1/2 Oz. Current Price: $ 837.00 | (14 Bids) | | Sale Ends In: 14m 24s
	18K gold lot Bullion wear scrap melt Round bar Current Price: $ 200.01 | (15 Bids) | | Sale Ends In: 19m 2s
	gold flake by the bag lot Bullion wear scrap melt xXX Current Price: $ 0.99 | (0 Bids) | | Sale Ends In: 22m 34s
	$20 MINI 1907 ST.GAUDEN BULLION COIN BAR+2 GOLD VIALS Current Price: $ 2.47 | (4 Bids) | | Sale Ends In: 32m 56s
	18K Gold Bar Bullion Chain Pendant Diamond Judaica Current Price: $ 1,895.00 | | | Sale Ends In: 35m 17s
	gold flake by the bag lot Bullion wear scrap melt xXX Current Price: $ 0.99 | (0 Bids) | | Sale Ends In: 38m 20s
	10 COIN LOT! OLD MINT GOLD SILVER U.S BONUS 24K BULLION Current Price: $ 19.95 | (0 Bids) | | Sale Ends In: 40m 31s
	(10) 24K GOLD FLAKE VIALS+.999 SOLID SILVER BAR BULLION Current Price: $ 9.77 | (0 Bids) | | Sale Ends In: 47m 33s
	BULLION BAR 1 TROY Oz OUNCE 100 MILS .999 FINE 24k GOLD Current Price: $ 3.95 | (0 Bids) | | Sale Ends In: 50m 21s
	1 GRAM OF PLACER GOLD!! CA GOLD NUGGETS/BULLION/DREDGE Current Price: $ 45.00 | (1 Bids) | | Sale Ends In: 50m 48s
	1 OZ.999 ENGELHARD SILVER BAR BULLION+10 GOLD VIALS Current Price: $ 30.11 | (11 Bids) | | Sale Ends In: 52m 4s
	gold flake by the bag lot Bullion wear scrap melt xXX Current Price: $ 0.99 | (0 Bids) | | Sale Ends In: 52m 13s
	PEN GOLD SILVER PLATINUM TESTER~TEST BULLION BAR~0 ACID Current Price: $ 35.00 | (0 Bids) | | Sale Ends In: 58m 16s
	(10) .999 PALLADIUM FLAKE VIALS BAR BULLION+2 GOLD VIAL Current Price: $ 9.77 | (0 Bids) | | Sale Ends In: 1h 2m 4s
	1 GRAM 999.9 24K GOLD BULLION BAR WITH CERTIFICATE Current Price: $ 43.00 | (18 Bids) | | Sale Ends In: 1h 9m 32s
	2.5 GRAM 999.9 24K GOLD BULLION BAR WITH CERTIFICATE Current Price: $ 99.98 | (7 Bids) | | Sale Ends In: 1h 11m 50s
	gold flake by the bag lot Bullion wear scrap melt xXX Current Price: $ 0.99 | (0 Bids) | | Sale Ends In: 1h 13m 4s
	5.9 Grains HIGHEST PURITY CALIF. GOLD NUGGET/BULLION Current Price: $ 20.25 | (0 Bids) | | Sale Ends In: 1h 21m 11s

A Quick Note From The Publisher... If you like the article above, you may be interested in the following article which is also related to Gold/Silver... Playing the Stock Market with Gold and Silver Finding the right investment opportunities can be hard... with the constant fluctuations of the stock market it can leave you wondering whether any investment is likely to pay off well over a long period of time. If you've been putting off making investments because you're worried that the long-term returns might not be worth the initial investment, you might want to consider investing in precious metals such as gold and silver. These investments not only tend to perform well over time, but are also the standard that most investors fall back upon when trouble seems to be affecting every other portion of the stock market. If you wish to know more about investing in precious metals such as gold and silver, the information below should help you with the basics and you preferred financial website or investment broker should be able to assist you with the specifics. Investments in Gold and Silver Many people aren't even aware that they can make investments in precious metals such as gold and silver via the stock market. These investments are often made in the form of indexes, and are traded in the same manner as if they were actual stocks. The value of these index shares will fluctuate depending upon the time of the year and other factors that can cause problems with the world economy, though precious metals such as gold and silver seem to grow in value the most during times of financial crisis when people are wanting to put their money into more secure currency standards. Gold and silver investments also tend to increase seasonally, especially around Valentine's Day and Christmas when jewelry sales show their biggest increases. Advantages of Gold and Silver As mentioned above, one of the main advantages of precious...