Gold is a commodity that has a value less defined by where you are and more by how it’s compared to the strength of the currency of other nations. The larger the currency the more impact it will have.
The price of gold in 2016 has started strongly with an increase of 5% in the space of one month. Although gold is getting stronger, it is still not as strong as it has been in previous years. Considering the soft dollar in Australia at the moment, gold is one of the more stable investments that can be made at this time, but its value can fluctuate dramatically when subject to international influences.
The ending of Obama’s 2nd term in the United States, the world’s strongest economy, statistically shows that when a new incumbent is elected, the market becomes uncertain and so stocks and markets will be expected to plummet for approximately the first 12 months of office of a new president.
Also, 2014 thru to 2016 has been the highest gold mining period worldwide for about a decade. So, experts expect the current gold deposits to dry up towards the end of 2016 and this will result in an increase in prices due to the slow reduction of available gold within the market.
Over the past 12 months the Australian dollar has dropped to its lowest point since the global financial crisis (GFC) of 2008. As of the writing of this article February 2016 the Australian dollar is currently 0.71USD and is forecast to drop as low as 0.67USD by the end of 2016.
At this point in time (Feb 2016) the current value of gold has reached $1600AUD per ounce. This represents a considerable increase, when only 6 weeks ago, gold had reached its lowest point since December 2014 at $1443AUD.
2015 has proven to be a good year for gold despite a 2 month decrease towards the end of the year. Over the coming months we should see a substantial rise in value in 2016, with gold expected to remain high for the remainder of the year.