(August 13, 2012) - Last week, HSBC, a London based multinational banking and financial corporation, told the media that it expects gold prices to rise to $1,900 per ounce by the end of the year thanks to a variety of reasons. According to a story reported by CNBC, a 'fiscal cliff' is approaching and the United States will be heavily involved in this event which is why investors there and elsewhere should consider precious metals in their portfolio as the stock markets begin to feel the election year impacts. Not only is the US going through a rough patch in the political sense as it does nearly every 4 years, said HSBC, it is also experiencing some economic problems. The euro and the dollar are worrying investors so HSBC, along with plenty of other voices in the media today, are predicting a rally in gold as investors try to stabilize their holdings.
Holly Elyatt, an Assistant News Editor at CNBC wrote, "HSBC’s analysts report that gold has previously bucked the trend of falling commodity prices because it is seen to be immune from governmental fiscal and monetary policies and as such it should, theoretically, attract investors as a 'neutral' asset outside the risk on-risk off spectrum. Indeed, the report states, gold should retain its value as central banks seek to prop up their economic systems with quantitative easing that can undermine currency markets."
Gold prices hovering around $1,600 an ounce are good news for those who are looking to get started at building a solid portfolio. Precious metals have a tendency to strengthen in value during chaotic times and profits are expected for those who hold them. However, it should be noted that most gold investors are looking for a larger value that they gain over the long run when they are holding the yellow metal. This is why they choose to invest, and they expect the ups and downs that come along with the ride. That being said, it is times like these when some remain uncertain about investing. Individuals who do value gold are quick to scoop it up while prices are favorably low.
HSBC was quoted as saying, "The big four central banks have printed around $9 trillion during the current crisis, roughly equivalent to the total value of gold ever mined."
This incredible statistic points to big problems in the world of paper based currencies that are no longer on the gold standard today. This is something that many economists and analysts have been warning about for some time. Gold is bound to be bought up by central banks even more than has been reported recently, some analysts say, because it can help shore up those banks against potential drops in value of the cash they hold.
All of this may not come as much of a surprise to some investors who have long stuck with gold through good times and bad, but it certainly is a lesson for those who might have been naysayers in the past. Clearly, gold offers big opportunities to those who want to be prepared for handling both the dollar and the euro's future.Report Filed: