Many customers ask us what causes Gold and Silver to go down and up. The answer is not very simple. Gold and Silver are traded on the futures exchanges just like copper, rice and pork bellies. On any given day, gold will trade within a 2% or more range. The prices are correlated to a number of factors, and those correlations can change within a momemts time. Since the economic crisis Gold and Silver have been somewhat correlated to the dollar. As the dollar goes down, Gold and Silver (as well as the stock market) have been going up. That correlation over the past couple of months has seem to been broken. You will now notice that when Gold goes down the stock market is up and many times visa versa. Gold seems to be acting the way it did for many years prior to the financial crisis. That is not to say that this will last forever. As stated before the correlations of gold and silver can change pretty quickly.
So the million dollar question is, “will gold go higher”. Nobody can say with certainty. You will notice for every expert predicting $5000 an ounce gold, there is one who is predicting $500 per ounce. I believe Gold and Silver will be in a tight range between $1000 and $1400 for the next year or so. After that, the economies around the world will dictate where it goes.