Many speculators view a direct antagonism between the US dollar and gold value at a given point in time. When one goes up, the other goes down. 28 people responded to a recent survey. Of those interviewed about the price of gold in the near future, nine of them predicted that prices will rise, fifteen of them predict that prices will go down, and four of them predict that prices will remain the same.
An analyst named Tom Pawlicki of MFGlobal, says that all precious metals, gold included, will see continue to stumble as they recently have been. In the short run, what threatens gold prices is that investors seem to slowly be regaining confidence in the market itself. He foresees gold prices stumbling back to roughly the $1,750 per ounce by the end of the year, but not any lower than that.
Another analyst, George Gero, recommends we pay attention to Comex gold futures, and specifically to where its interest rates settle at the end of this coming session. Recently, gold futures rose only marginally in interest. Gero believes that the failure of interest on gold futures to increase suggests that new investors are not entering the market consistently enough.
The continual introduction of fresh investors to a market at a consistent rate is necessary for that market to thrive. To feel confident about such an investment, Gero would look to see open interest increasing on investments during both and front months.
Another factor: is the Federal Reserve meeting on financial policy, scheduled for September 20th and 21st. The decisions reached at this meeting will likely decide to a significant extent how the stock market will behave in relation to precious metals in the near future. In regard specifically to gold, Pawlicki observes that, should the Federal Reserve choose to go through with a “quantitative easing” plan, it would benefit many commodity markets including but not limited to gold, palladium, silver and platinum.
He also makes the observation that, in 2008 and 2009, supply liquidity (the ease with which investors can trade their commodities or investments for cash at a given time) did not seem to make a significant impact on the price of gold.
Rather, gold prices appear to respond more actively to credit issues and the riskiness or stability of the investment market a given time. When investors had the opportunity to trade their holdings for cash, or when liquidity swaps became available to them, they tended to take advantage.