1. Reduction in Confidence in Paper Money. This has occurred due to significant increases in the growth of money supply around the world. Governments around the globe are printing more money than ever before and in a very short time period. This will cause inflation which will result in even higher Gold prices.
2. Increased Demand for Physical Gold. With the confidence in paper money dropping, investors are looking for Safe Havens for their money. Physical gold represents one of the most sure safe haven investments around. As investors buy more, the price of Gold will continue to increase.
3. Rotation into Commodities. There has been an increasing trade surplus between the US and China for more than the past decade. That typically leads to a rotation of strong commodity value. That trade deficit will increase the value of commodities and drive up the price of Gold.
4. Falling production of actual Gold. It takes about a decade to bring Gold Mines into production from exploration. In the 90’s Gold prices were so depressed that production began to disappear and very few new mines went into production. With the increased price of Gold new mines are now being defined and developed, but actual production has decreased over the past decade. The reduced supply will increase the price of Gold.
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