Without a doubt, 2013 was not a good one for gold investments. In fact, in just this year alone, gold lost over a quarter of its value. When compared with the value of gold just two years ago, the trend is quite different. After all, in September of 2011, gold reached an all time high of almost $1924 an ounce.
What is the Approximate Value of Gold?
The day following Bernanke’s announcement that the US Federal Reserve will decrease bond buying activity from $85 billion to $75 billion per month, gold dipped below the $1200 an ounce value. However, one must note that since this bond buying activity began in 2008, the value of gold has more than doubled in value. Of course, the program, itself, injected money into the US economy in an effort to ensure that interest rates remain lower and the US does not fall into a recession once again.
How Will Gold Perform in 2014?
Well, according to most financial analysts, gold will not make a comeback in the new year. In fact, many analysts suggest that the average price of gold will be valued at approximately $1200 an ounce in 2014. This total is substantially lower than the previously predicted value of about $1325 an ounce. Analysts argue that gold will hover around the $1200 an ounce price point in the new year as bullish stock markets and improving economies usually mean that gold will no longer be a preferred investment.
However, if there are serious political problems and/or if the economy in the United States were to worsen by a significant margin, more individuals will choose to invest in gold. Conversely, it is also important to note that India, a large consumer of gold, will now be subject to government led restrictions on imported gold.
Overall then, unless there are substantial changes in the economy or the political situation in the US, the chances of gold reaching high values once again seem highly unlikely.
