However, the expectation is that during the following three years gold prices will tend to recover, reaching an annual average of around US$1,500 in 2017.
The rapidly rising gold price indicated falling confidence in the dollar, and the Fed feared that this lack of confidence would spread into the currency markets.
Gold prices have been volatile, but well within ranges and though the metal has had a strong run in 2006 and prices were fairly high, analysts expect there will be a further appreciation.
In these gold markets, we mainly engage in spot trading. The gold price that we release to customers at 9:30 every morning is determined in reference to the quote of the Sydney market.
If we are to believe the numbers delivered by the Shanghai Gold Exchange then the gold price cannot remain at current levels and 2014 will prove a watershed year for gold!.
Even though the price of gold had dropped below 3,000 yen, we were uncertain whether it had yet reached bottom, so we advised our customers that,"the gold price might still fall further.
In the 1850s, the price of gold relative to silver in Japan was set considerably lower than in international markets and as a result there were massive outflows of gold in a short period of time.
Furthermore, although the price of gold has languished for quite some time, from everything that I have heard and read, the physical gold market has never been stronger.
The problem with gold today is that it is completely beholden to the western monetary system- the price of gold on the international market is quoted in US dollars.
Subsequently, from the late 1990s until 2009, mining production of gold began to decline and the price of gold soared in real terms- almost back to its inflation adjusted 1980 peak.
Over the past half century, new gold mining supply has added anywhere from 1.1% to 2.4% to the existing stock of previously mined gold(Figure 4) and gold prices tend to vary inversely with the degree of mining supply coming on line.
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