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Posted: 26 Nov 2013 02:41 PM PST

By CoinInvest Direct on November 26, 2013 in Gold

The gold price charts do not make great reading for many investors at the moment and analysts are predicting further falls before the precious metals markets recovers. There may be some concerns for gold investors, but as the price charts from the last forty years show, gold often swings between bear and bull markets, but always comes out on top.

The precious metals market is influenced by major factors that includes the activity of central banks who can sell and buy gold in large quantities, political involvement in international conflicts and crises, supply and demand from industries and investors together with the general health of the world economy.

The Bull and Bear Markets

Gold witnessed a meteoric rise throughout the 1970´s, leaping from a mere US$35 per ounce to peak at a massive US$870 per ounce during the course of the decade. In January 1980 gold prices were US$677 per ounce. Part of the reason for the increase was because the dollar and world currencies in general were weak. The greatest influence however was the scrapping of the gold standard and the freedom to trade precious metals internationally.

Over the next twenty years, gold prices had a bumpy ride and lost almost US$400 of its value. The main reason for the downward spiral is due to the end of the economic stagflation of the 70´s and long term plans to overhaul the economy during the transition from industry to technology.

The 21^st Century heralded a new age for mankind and a new frontier for precious metals. The Millennium witnessed another bull market and the price charts rampaged from US$265 per ounce in 2001 to an all-time high which peaked at US$1913 in August 2011.

Gold Prices in the New Millennium

The catalyst for a rise in gold prices in the new Millennium was hinged around demand. Jewelry and industrial quarters were looking to increase their purchasing power, but a 10% drop in production meant demand outweighed supply and prices went up. In addition, the World´s central banks started stockpiling gold reserves.

George W. Bush´s "War on Terror" had significant implications on the gold prices as it increased the US national debt and weakened the dollar. When US currency is weak, gold is always stronger and vice versa. However, since congress raised the debt ceiling the US dollar has strengthened which is why gold is currently in decline.

The 2008 collapse of the global economy was the biggest influence on gold prices since the turn of the Millennium and in the preceding three years gold prices soared. Since then the precious metals have swayed between bear and bull markets. So what does the future hold for gold?

Analysts are uncertain which way precious metals will go at the moment and traders are turning their short-term attentions to brent oil. Meanwhile gold prices are dropping so this is a prime opportunity for investors to buy. Gold prices will stay low whilst the US dollar is strong, but given the amount of debt the US is in, and China´s efforts to bring the Yuan in as the global currency standard, how much longer can the dollar keep up its strength.

For the latest gold prices visit coininvestdirect.com and make your investment for tomorrow today.

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