Finance-ManagementsInterest Rates, Gold Prices and the World Economies
Gold prices have been at all time highs recently, this past month the gold price went above $1500. Some analysts fill gold prices will go over $2,000 and ounce this year because of growing demand across the world. Central banks are buying fold in places in Asia and India is also a big buyer driving up prices.
Inflation and interest rates on bank CD rates have been low with is usually since gold used to go up in a high inflationary economy. CD rates at banks will stay low for the next couple of years thanks to the Federal Reserve keeping interest rates low until 2013.
Other factors driving prices higher and interest rates higher in certain counties include Greece which is near default on it’s debt because they have billions of dollars of debt which will drive CD rates cdrates.monitorbankrates.com lower than CD rates already are. The country could end up ditching the Euro or the European community could dump Greece as the cost to bailout the country grows other member nations might not want to deal with them anymore.
All these problems could cause the collapse of the Euro and maybe certain countries currency would collapse as well forcing countries to use gold again as a reserve.
The developing world also has credit problems and currently problems including higher inflation and interest rates then the developed world. Look for interest rates across the world to move higher in the coming years and gold to also continue to move higher.