Gold Price Review

Reviews on spot gold prices, gold stocks & futures, related news and Technical analysis.

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Saturday, February 11, 2006

Why gold is soaring -- and could keep going

It's not just inflation worries driving gold futures to new highs. Here are some ways you can still stake a claim in the rally by investing in companies that mine the metal.

In the article from MSN Money, author Robert Walberg talks about Gold.
After spending most of the year confined to a $30 range, gold futures have exploded to their highest level in nearly two decades. Since bottoming on July 15 this year, gold is up 20.5%, with 12% of that gain coming in just the last month. Gold stocks have done even better, gaining an average of 61% since bottoming in mid-May.

The rally is finally starting to draw the attention of investors, who want to know what's behind the big surge in gold prices and gold stocks -- and, more importantly, if it's too late to take part in the rally.

One reason cited for the price move is investor concern over inflation. However, there are many more direct hedges against inflation in today's investment world than gold futures. Oil futures quickly come to mind -- especially considering that the big jump in crude over the last year is largely responsible for the inflationary pressures in today's economy.

Some points he noted:
-If not inflation worries, then what?
-Demand grows while mines decline
-There's still some luster in gold stocks

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