Gold investment has always been something of a tricky concept, in large part because it simply works so differently from other forms of investment. When you put your money into normal, publicly traded stocks, you can forecast the outlook for those stocks through observing a number of different resources. Company earnings reports, general trends in industries and the stock market in general, and consumer attitudes can all be clear indications of where a stock might be headed. On the contrary, because gold is not connected to any specific company or even economy, it can be a bit more difficult to predict in terms of future outlook and investment strategy.

In general, however, it helps to understand the nature of gold investment, which is that it is usually done more for the sake of stability than financial gain. People who invest in gold usually do so in order to put their money behind a stable resource, as opposed to a turbulent currency, and gold investment site. make it easy to compare gold prices to currency strengths. Often, when a popular currency like the U.S. dollar or the Euro is declining in value, people buy gold bullion so as to protect the actual value of their wealth. This has been a generally popular concept in the last several years, as the U.S. economy has been fairly weak, with the value of the dollar down. However, current forecasts suggest that this may change in the near future.

Given the general strength of gold in recent years and the continued struggles of the U.S. economy, many people projected a strong finish to 2012 for the price of gold. In general, it was expected by many (as of the outset of the year) for gold to finish 2012 at or about $2,000 an ounce, which would be considered a strong number for the commodity. However, over the course of 2012 the U.S. economy has experienced some mild recovery, and there are economists who expect the recovery to continue. Along with this, the dollar has strengthened considerably, which means that people are more inclined to keep their money in U.S. currency rather than investing in a suddenly weakening gold market.

With specific regard to the forecast, a recent Wall Street Journal article projected the price of gold for the remainder of 2012 to miss the initial forecasted high by nearly $250 per ounce, expecting an average of roughly $1750. Of course, this is merely a projection and anything can happen in the gold market in the coming months. If the United States economy experiences a sudden drop or shift, gold may well rise again, as investors are weary of turning to the weakened Euro. As for the immediate forecast, however, it seems that the U.S. dollar has actually become reliable again, which may mean that now is not a strategic time to look into gold investment.

This is a guest post on behalf of BullionVault, written by freelancer Alan Jacobs.

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