Gold ?

On July 18, gold prices reached record highs in 1.602 U.S. dollars per troy ounce. The increase means the already 10-fold in the past 10 years compared with the total yield on the Standard & Poor's is only 32 percent, it is easy to imagine that the rise in gold prices seem to already be over.

However, market watchers said it was likely the price of gold will continue to increase. If you invest in cash, investors will not get anything. U.S., Europe, and China keep their interest rates remain low. Price of paper currency is likely to slump continues with the possibility of default will be experienced by U.S. and European governments. "These issues can be a supporter of rising gold prices. There is no issue that will be completed," said David Wislon, commodities analyst at Sociate Generale.

If back in the 1980s when gold prices peaked, the inflation rate rose 1 percent per month and interest rates skyrocketed to 14 percent. The price of gold was to be doubled in just two months. International gold distributor in North Africa Krugrrands to run out of gold coin production. In the U.S., central bankers busy dismissed rumors that they would re-use the gold standard. Although arising enthusiasm that gold prices can be seen from the television ads about gold coins, most analysts agree that the euphoria will not happen as bad in the 1980s.

Another sign of a sign of excitement in the gold market is the increase in "real interest rate" or interest rate adjusted for inflation. When real interest rates negative, the cash will lose its value. Investors also will divert their money into riskier assets and add another asset such as gold. That is the situation during the last rise in gold prices when the interest rate on a 10-year bond fell from 1.94 percent in January 1977 to minus 4.65 percent in June 1980. However, real interest rates rose again in 1980 to stop the gold price. So, as long as real interest rates on U.S. Treasury three-month tenure that is currently at position minus 3 percent remained negative, the price of gold will continue to progress.

In the past, the rise in gold prices was also suspended when speculators or buyers who are betting that gold prices will go up to reduce purchases and buyers is fundamental gold artisans, and the mining company became the dominant buyer in the gold market. In January 1980, for example, Krugerrands sales fell 42 percent despite rising gold prices. Investors should also pay attention to developments in Asia. China and India is the consumer 58 percent of global gold during the first half of 2011, according to data from the World Gold Council. The figure rose from 34 percent last year. It occurs because the problem of inflation in Asia. In India, inflation jumped to 8.7 percent in May, while in China of 6.4 percent. "If the buyers from Asia have declined, investors should be cautious," said Saeed Amen, a gold analyst at Nomura International Holdings.

"Meanwhile, that must be considered also shares in gold mining companies," says John LaForge, commodities analyst at Ned Davis Research. Typically, gold is trading at 1.05 times the ratio of stock prices of gold mining companies. Currently, the ratio becomes 1.48. That is, the gold mining company is still below market value (undervalued). Shares of gold mining companies fell 3.2 percent this year compared with an increase of 11.7 percent on the price of gold. Partly because of rising oil prices.

Rebecca Patterson, global chief strategist at JP Morgan Asset Management, recommends investors hold only slightly golden, about 1 to 2 percent of their assets are secure, including cash and U.S. government to bond. "At least there are still concerns about Europe and the U.S.. Gold is expensive, but expensive for good reason," he said.