Is this the start of a new bull market in gold?
The price of gold soared 9 per cent in one session to end the Wednesday trading session at $US850.50 an ounce. This percentage gain was the most in one session since September of 1999.
BGF Equities analyst Warwick Grigor said, “A large move in gold overnight is a signal that times are changing. It is not an intra-market movement — it is more fundamental.” He also said, “This could be the start of a new bull market in gold.”
But why has the price of gold being going down in the last few weeks? One reason is that hedge funds have been getting rid of their gold to raise cash to pay brokers who had lent them money to make investments. However, this was slightly offset by the Fannie Mae/Freddie Mac bailout that actually pushed gold prices up.
Analysts think the price of gold will continue to rise in the next few months. What do you think and why?
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