METAL | Production | Processing | Trading

Gold has experienced a spectacular rise recently. I say recently, the metal has been trending upwards for months.

With limited supply, the pressure should always be easier to apply to the upside. However, if this were the only argument then precious metals prices should never really fall.

Perhaps the market is not particularly overbought at the moment so there is still good room for manoeuvre to the upside; unfortunately, the same can of course be said for the downside.

We are in uncharted territory. With inflation remaining weak, interest rates likely to stay low, the US Dollar showing no real signs of recovery, banks still looking a bit weak and fears over the strength of the rebound in world growth, all the factors pushing Gold to the upside continue to linger on.

Looking at gold on a given day though, the price can easily rally on any weakness in the US Dollar. Of course when a market jumps like that then some investors will inevitably close their positions and take their profits. That can then cause the markets to fall, albeit temporarily.

This having been said, selling Gold has proved to be an expensive mistake for quite some months. Aside from minor corrections, the price has slowly ground higher through the whole period.

Not only this but since breaking above the critical $985 level back in September 2009 and then repeatedly failing to get back below it, the omens have started to favour yet another spike higher.

In an era of concern over the value of assets, gold holds its age old allure.

There is still much uncertainty in the markets. The big recipient of all this uncertainty remains the precious metal and it is tempting to speculate that no matter which currency gains the upper hand, the continued undervaluation of the emerging BRIC country currencies will perhaps drive the price of gold to undreamt of levels.

So what are the options for the investor? I prefer to