Gold is now on the way of enjoying the 12 year rally, which happens to be the longest in the past nine decades and the most encouraging part is that this trend seems to continue in 2013 as well. The reason being that due to the stimulus released by the central bank, less than the expectations, big investors have the biggest holdings of the bullion ever. According to the median of 16 analyst estimates compiled by Bloomberg, the yellow metal is to be seen averaging $1925 per ounce in the final 3 months following the rise every quarter.

As the global recession is yet not showing much of the good signs for the recovery, the central banks in both Europe and China are taking further steps to resist the inflation and currency devaluation and enhance growth process. Because of the recession and the currency devaluation, investors have already purchased almost 247 metric tons which is even more than the US mine output. Not only this, the Congressional Budget Office, also showing the concerns over the economic hurdle has warned that if the spending cuts and tax rises aren’t resolved, the recession is going to slow down the economy further.

The contradiction also continues regarding the value of the currency as few experts claim that current recession is devaluating currency and may persist for long. On the other hand, there are few experts who claim that the average of Dollar Index would value 82.6 in the coming year from just 81 now. The global condition is not very good. Neither the currency market nor the commodity market is convinced that Federal Reserve can actually assure to disseminate the required amount of fund into the economy. IMF has also cut its 2013 world growth forecast twice to 3.6 percent since July.

The yellow metal still is expecting a comeback after its adjustment for inflation and moreover, there are still many hedgers and speculators who have a huge holding of long position for 140,162 futures and options which will undoubtedly rally the gold price. Quantitative Easing measures also seem like stimulating the investment in gold only. As the dollar seemed weak, gold could only be entrusted. The monetary stimulus released by the bank is also not favoring the economy on the whole, the investment in the gold market shows a definite increase and the prices will, in most cases, move up.

Note: This blog is just an expression of the author’s opinion and cannot be deemed responsible for any losses incurred.