By Lipa Roitman Ph.D.
April 2012
Gold prices can change at the blink of an eye. Right now the gold price is down, but many forecasters now predict that the price will rise again to around 2,000 USD in late 2012 . In January their forecast was 1,600 USD at most. An understanding of how to obtain an accurate gold forecast is essential in order to capitalize on the gold index. It is easy to do online through a proper search on your favorite search engine.


Equity Market
The demand for gold, generally regarded as a safe haven, has been remarkable. Many think it is a safer investment than stocks and bonds. However, there is a valid link between equity market turmoil and the price of gold. The primary lesson that inexperienced investors sometimes forget is that gold, like any other commodity or market, is subject to supply and demand. Therefore the market is unstable like any other. Having a way to monitor it is vital.

Currencies
One of the other considerations in determining the value of gold is any change in the exchange rate of a currency. All of this can be monitored with a gold prediction site that you can trust. They will keep you up to date on gold forecast and changes in the market.
As a rule of thumb, the stronger the currency, the lower the price of gold will be. This explains why the gold market has touched historically high levels over the past few months. The Euro Zone crisis and the fluctuations in the US currency have driven investors to gold. This has the precious metal’s value on the rise once again.
Global News
Another factor in Gold forecast basics is global news. We know that troubling global or domestic issues cause the price of oil to increase. In a depression, the demand for oil tends to decrease. Gold has similar, but not the same relationship to international turmoil. There are also political implications that can cause the price of gold to increase. When the Congress was unable to reach a timely agreement on the debt ceiling, the price of old soared.

Jewelry Manufacturers
The world-wide demand for gold is also dependent upon the strength of the economy. Inasmuch as 80 percent of gold is used in retail trade by jewelry manufacturers, the demand for jewelry is closely connected to such factors as the Consumer Confidence Index, the unemployment rate and growth in GDP. Favorable data in these important areas definitely impact the demand for gold because they influence the demand for jewelry purchases.

Inflation
The inflation rate will have an impact on gold prices and value. Gold is regarded as an excellent protection against inflation. Therefore, when the inflation rate rises, the demand and the price for gold increases. The dynamics of interaction between all the factors in time creates waves of demand and supply, which overlay the long term upward trend, creating the famous saw tooth pattern of peaks and troughs in gold price.

Summary
By studying these interactions using number crunching algorithms, one can predict with some degree of precision what the future gold price will be.
Whether you are selling, investing or buying gold the market can change very fast. This is why many people have chosen to invest in gold, but rest assured that they pay close attention to the updated gold forecast that has been made available to everyone.

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