Gold price possible to go back and forth at fresh high

A new round of rise in the price of gold from late January 2011 has shown a slowing-down sign. The SPDR Gold Shares, which has been the largest and most liquid gold ETF on the market and the second-largest exchange-traded fund (ETF), is apparently seeking to locate the trend of the gold price for the next step.
The gold has generally hovered around 1,360 US dollars an ounce overall, but some factors affecting global market trends have not undergone radical changes since the beginning of this year. Neverthelessr, the global economic recovery will continue to advance hopefully in 2011 and the demand for gold will possibly reduce as a final refuge against universal currency debasement. But the a fresh issue coming to the fore is that the global food and energy prices will climb gradually, and bloating inflationary anticipation aggravates along with the warming of economy, which remains a key uncertainty.
Under such circumstances, the interests of governmental and non-governmental institutions or organizations for gold storage have enhanced, and some analyts noted that inflation bloating pressure will become a main power to support the gold price to rise.
According to a report of the World Gold Panning Association released last month, three key factors have caused the gold demand to continue to grow: First, Asian nations' demand for gold jewelry, bars and coins has been on rise; second, the demand of gold for modern industrial use bounces further, the warming of consumption electronics and other trades cause gold consumption to increase and, third, as a result of the market's bloating and flatulent anxiety is aggravating, the investment demand for gold is strong.
In addition, central banks in a number of countries are also increasing their gold reserves, so as to dispose of or improve their foreign exchange market structure more rationally and reasonably.
After the turn of the century, gold has experienced a bull market over the last decade, and especially since the eruption of the U.S. sub-prime mortgage and credit crisis in March 2007, gold price has created repeated historical new highs. The relevant data show that gold prices rose an average 18 percent a year over the last decade. In the late 1980s and the entire 1990s between the two gold price peaks, world economy had expanded and headed to a steady progress, some developed nations are implementing a stable monetary policy, and the world price of gold remained completely stable and in line with the gold standard the entire time. Afterwards, when global economy was in a major crisis of the 1990s, and the value of world currency led by the US dollar had eroded, gold played the role of a fund shelter, its resistance to financial risks was very remarkable and so gold was sought after heatedly.
The Australian newspaper "The Herald Sun" said in its website on Sunday, February 13 that "the gold Tsunami" has already appeared. The website quoted the report of its headquarters company, the Sprett Asset Management in Canada, as saying this gold Tsunami had something to do with the massive gold consumption in India and other Asian countries.
The price of gold, as a precious metal commodity against a declining dollar, is linked directly to the supply of US dollar. The dramatic rise of gold price in 2010 was inseparable from the large-scale depreciation of the dollar. At present, the US-led developed economies tend to go on implementing their monetary policies and pull a more abundant fluidity into the global monetary market. Insiders estimate that the dollar's depreciating tendency remains unchanged for the medium and long terms, and the price of gold at the other end of the seesaw would rise just "like boats going up with the level of the water".
It is noteworthy that the instable situation in geopolitics has also become the latent power for the possible rise in the price of gold. Take turmoil or turbulences in the Egyptian situation today. It would spur the price of gold to rise for the current short term. Moreover, world economy is still facing many uncertainties. Once the partial situation has a slightest sign of trouble, there will be an increase in the demand for gold or "a marked rise of temperature" once again.
However, most analytical agencies maintain that the price of gold will not keep climbing this year as it did in 2010. According to data from the Southern African Pyrometallurgy 2011 International Conference held in early February, the upward trend in gold price rise has already slowed down after it had reached the epicycle apex. This is chiefly because of the fact that US economy is dejected, the unemployment is on rise and the US real estate market slides, so there are no longe of the "themes" for the markets. Hence, the investors will possibly shift to other metallurgical industries or bulk commodities markets.
The impetus to spur on the rise of gold price has not undergone a rapid change, and the price of gold will probably pace back and forth at fresh high or in single digits for months ahead.

(Source: http://english.peopledaily.com.cn/90001/90778/7287349.html)