Gold prices were quite volatile in 2011. There were a lot of fireworks for the precious metal, not the least of which was a new record for gold prices in 2011 — the London fixed price of gold hit $1,895 twice in early September. Spot gold prices for immediate settlement, also known as gold futures to some, briefly cruised to $1,916 per ounce around the same time.
Click to Enlarge Investors who bought gold in 2011 were richly rewarded. Year-to-date, the precious metal is up 25% — with very few periods where gold moved down instead of up.
But gold investors typically are less concerned with the past than they are curious about the future. Specifically, what will 2012 gold prices hold for precious metals and commodity investors?
In a nutshell, it should be more of the same — strong demand from risk-averse investors, the prospect of high inflation propping up commodity prices and hopes of yet another record for gold in the new year.
Let’s take a look at these three issues in more detail, and also the best ways to invest in gold to profit from these trends: