American Bullion -- Gold Bullion Prices Soar

Tuesday, February 02, 2010 at 12:00pm

Gold bullion prices soared on Monday, posting their biggest daily gain in three months. The dollar weakened, soon after posting six month highs, and investors continued to buy physical gold at bargain prices. The cost of buying gold is at a short term low according to Bloomberg.

This scenario is encouraging investment according to Kate Harada, a trader with Mitsubishi Corp Futures & Securities in Tokyo, who said recently that low prices are causing more people to Invest in Gold. "We're seeing some bargain-hunters active as physical buyers and that's supportive," she said, adding, "The dollar index is still the key."

The dollar tends to fall as the price of gold bullion rises. Marc Faber, the Swiss fund manager and Gloom Boom & Doom editor, suggests that gold will hold above the $1,000 per ounce mark, and because of its price, makes for an attractive investment. He said: "We will not see less than the $1,000 level again. Central banks are all the same. They are printers. Gold is maybe cheaper today than in 2001, given the interest rates. You have to own physical gold."

That is a very good argument for buying your physical gold in either gold bars or in the form of gold coins. Professional traders are increasing their bullish stance on gold bullion prices and projections for the short term future price of gold bullion range from an increase of between $200 and $400. With the strong dollar creating havoc with the euro-zone currency, and with Bernanke and his easy monetary policy leading the way, the outlook for gold bullion prices has never been better.

The upside potential for gold should be evident when the reports on deficit spending continue in the headlines. Gold is still the best hedge against inflation, and buying physical gold can strengthen any portfolio.