The onset of the global financial crisis, the credit crunch, and the subsequent move by many of the world’s leading central banks (most notably the U.S. Federal Reserve) to resort to effectively “printing” money through a policy of quantitative easing has produced a spectacular rally in the price of gold. Ever the standby store of value, the metal proved attractive first as a safe haven asset amid collapsing global capital markets and next as a hedge against what would surely be a period of runaway inflation. Timing monetary policy is notoriously difficult, so it seems only reasonable that the consequence of record-low interest rates and churning printing presses would invariably flood the market with currency and send prices soaring.

Credit:
Forecast for Gold