In 2005 I said that it didn't really matter whether gold closed the year at $400 or $500 an ounce - the trends were in place to ensure a much further rise. Seven years later, we can say it doesn't matter whether gold ends 2012 at $2,000 or $2,500.
That gold continues to climb a wall of worry, and that so many are even calling it a bubble, is actually an extremely bullish indicator since financial bubbles burst only after sustained periods of exuberance.
Gold will continue rising in value over the coming years for one reason: The primary buyers are purchasing physical gold for wealth preservation, and there simply isn't enough physical gold to satisfy their appetites.
Asset allocation is one of the most crucial aspects of building a diversified and sustainable portfolio that not only preserves and grows wealth, but also weathers the twists and turns that ever-changing market conditions can throw at it.
It is important to note that on that historic day the dollar quietly ceased to be money and instantly became a currency. Money and currency are often considered as one and the same; however, there are meaningful and significant differences.
Savvy investors and pension fund managers can protect their portfolios and ensure future liabilities are met by allocating to precious metals bullion now, while there is still enough supply available to meet pension fund needs, and price is reasonable.
Despite gold traditionally suffering from a lull in the summer months, this year we have seen a perfect storm of economic events bolstering its price. In times of uncertainty savvy investors use gold as a store of value and way of protecting wealth.
If we set aside preconceived notions and examine why gold and precious metals are resuming their historical role as money, if we establish a gold mindset, we will see that their real value lies in forming the foundation of an investment portfolio.
Numerous commentaries, both on television and in print, would have us believe that gold is a bad investment. These articles miss the point, because they treat gold as an investment. To fully understand gold's role, we need to adopt a new mindset.
Based on current economic factors, we expect gold prices will end the year somewhere between $1,700 and $2,000 per ounce. Silver and platinum prices will experience similar growth based on investor demand.