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Gold price is consistently increasing for the past ten years and now it is selling at more than $1,000 an ounce. Analysts are expecting that the trend will continue and it can reach up to a whooping $4,000 or $5,000 per ounce.

Ron Paul, congressman and former presidential candidate says, “It’s trebled in the last ten years. There’s no reason it can’t triple in another ten years, that wouldn’t surprise me.” With the increasing foreign debts dollar is crashing and it will help gold to gain value.

From an investment perspective gold is always considered as a zero coupon bond. Few years back investors were reluctant to buy gold and were confident for stocks and bonds. Although demand for gold has not increased to an unexpected level but it is higher than before. Fall of leading financial institutes, tumbled oil prices and weaker dollar has increased the devaluation risk for dollar and paper currencies and therefore commodities like gold, silver and copper will continue to rise.

According to Jim Rogers, a famous investor, “If you are going to diversify (your portfolio,) it’s got to be commodities, because they will go in a different direction from your other assets.”

Gold price always fluctuate with dollar. If dollar manages to recover then there are chances that gold price will not increase further or even can go down. Analysts are not very sure about the future of gold and dollar. Some experts are predicting that gold will not continue to rise. Canaccord Adams, the Canadian investment bank, says September is traditionally the strongest month for gold: October, by contrast, has historically been much weaker.

In current economic scenario it is difficult to predict future of the market. In between the uncertainty of deflation and inflation it is best to invest in a diversified portfolio that includes commodity, stocks and bonds. In commodity sector other metals like palladium, platinum and silver can also reach to new heights.

written by REI Circle (www.reicircle.com)