“Golden days” continue… What should investors do?

Market Leader informed

Gold keeps restlessly growing in price, conquering one historical high after another. The situation for investors is rather difficult: to buy, to sell or to maintain?

Let’s find out what makes gold behave in such a way! According to some experts, the reasons for the “rise” of gold are in the following:
• growing money supply
• unstable economy
• formation of international reserves

Inflation processes connected with USD make gold prices rise. According to the latest data, the US Federal Reserve will buy back its liabilities in the volume which is twice as low as it was previously announced. Consequently the volume of the unsecured money supply will rise up to almost $500 million. The logical conclusion is that in the short run the factor is going to push the gold price further up.
As far as the unstable economy is concerned, only this summer politicians started saying that national economies survived the crisis. But nobody can guarantee stable economic growth in the sort-term perspective. The forecasts are unspecific as those who make them are carful. So it can be definitely concluded that this issue will also promote an further increase in the price on the precious metal in a fairly long-term perspective.
And finally, one more issue is demand for gold from numerous central banks. According to mass media, the Chinese government has strictly ordered the People's Bank of China to increase the gold reserves. India comes second (a 31% increase) after China (a 31% increase). Iran has recently joined the company of those countries who increase their gold reserves. In October 2010 the international reserves of the Central Bank of Iran exceeded $100 billion. Yet the production of gold is lagging behind the demand. Experts estimate that the gap between the supply and demand is 27%. The situation also speaks in favor of gold-price growth.

So the final conclusion is that the “golden days” continue… that is why:
• If you have enough money to invest in gold, do it.
• If you have some gold in hand, don’t sell it
• Sell only if you do not have other reserves

$1400 per troy ounce of gold is not a myth any more, but a mid-term objective.

After reaching a new historical high at $1387.1 the price has retraced, forming a bearish wave of level H8. The Department of studying Masterforex-V trading system notes that at the moment the price is forming a downward wave as “the MF Moment of Truth” for the current situation.
The price will either break through the high with further uptrend or reverse the mid-term uptrend at least for a D1 retracement.

The potential resistance levels for the uptrend:
1370,1
1378,6
1387,1

 

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