While other commodities such as crude oil continue to show price gains, gold and silver prices have lagged behind as both gold and silver have held steady or shown modest price drops in recent weeks. Some economists attribute this lack of change in gold or silver prices to growing financial optimism around the world and occasional increases in the strength of the dollar. Investors can find solace, however, in other precious metals. Palladium, for instance, has demonstrated solid growth, recently hitting a ten-year high and closing at $812. per ounce, just off the price of $814.50 established in 2001. And many economists and financial experts believe that palladium’s price will continue to grow this year. Some estimates for palladium predict the precious metal will spike at over $1,100 in the days and months ahead, making it an excellent short-term investment as we continue to pull out of the recession. This estimated growth is a combination of a variety of factors, including supply disruptions of palladium from Russia and South Africa and lower-than-expected worldwide stockpiles of the precious metal. Also driving the price gains will likely be that growing demand for cars in China, where palladium is used in in pollution control devices and electronic components. The projections for palladium could be even higher for 2012 and 2013, with prices as high as $1450 possible according to Deutsche Bank. However, there could be a price withdrawl in palladium if the United States institutes laws or promotes a steep growth in electric cars, which do not emit exhausts and require palladium-based catalysts.
Prices of gold should continue to rise in the weeks, months, and year ahead. That is the most recent gold news from various sources around the world, not the least of which is Michael Lewis, London-based head of commodities research at Deutsche Bank. Despite a recent drop in gold prices, the price per ounce will continue to go up for a wide variety of factors. Demand for the precious metal will continue to rise around the world, driven by European investors interesed in a safe haven investment during uncertain times. Low real interest rates in the United States will also aid the rising gold demand, and investors are likely to buy the precious metal as a safeguard against both inflation and deflation. With all the rush to buy gold, some investors fear that a bubble may form, making gold a riskier-than-normal investment. But Lewis assuages investor’s fears with this statement: “Given these risks, we believe gold will continue to compete aggressively for investment capital. On our estimates, the gold price would need to move above $2,000 to represent a bubble.” And with gold prices currently hovering around $1400 per ounce, a rapid ascension to the $2000 level is unlikely, even with higher-than-average demand like that we now are experiencing. Investors around the world, including those in India, may also note that the increased demand for gold, and the accompanying rise in price, may drive some investors toward other precious metals such as silver. In any sense, Lewis’ words should be heeded as it belies a wise gold investment strategy and a safety net for the future.