Unfortunately being just another bod, the likes of J. P. Morgan and the Federal Reserve don't confide in me! The best tool in my armoury is therefore 'observation'. This is why I've scoured the press and internet to try and make sense of it all.
We've heard a lot recently about the Ukraine crisis pushing the price of gold up and of falling prices when Janet Yellen talks up the green shutes of U.S. economy growth. Outside of this there are some other major factors that influence the price: the U.S. stock market, interest rates, the strength of the dollar and not to forget inflation. Oh yes, and are we in a 'Bull' or 'Bear' market?!
Picking your way through all the information and decyphering the different agendas is not an easy task, and at best a minefield of distraction. So we have to look at the basics. For any investment you need a steady base growth. Making the lows higher and highs higher, this way gold keeps a strong base. When we look at the last few months of growth January saw gold hit £726.90, its lowest since January 2010. The last two months have seen a return to form peaking in March to £830.62. Since then the base seems to be holding around £760.00 to £770.00. Watching carefully over the next few months with all the influencing factors mentioned earlier, will be key to showing us where gold is heading and whether the banks and governments have got it right with QE, tapering and other heady cocktails!
It could certainly be said it's following its habitual rhythm, strong for a couple of months then followed by a sell-off. So depending on where you see world affairs and economic growth heading, you'll either be running to, or from gold the-safe-haven! In plain we will just have to wait and see.
If you have a crystal ball please let us know! All comments welcome :)