When people get nervous about the uncertainty of world events and its unstable actors (Russian, Syria, North Korea), Gold always gains in value as its seen historically as having pure monetary value, unfettered by government policy. Of course, with the Fed artificially lowering interest rates, Gold has been held at an artificial low as investors cautiously seek paper investments. However, with the Fed releasing its choke hold on interest rates and they return to normal values, so too will the value of Gold and Silver return to their proper values and rise as the world and its governments increasing becomes more unstable.

Bloomberg Markets – Gold will end the year higher, spurred by faster inflation and political tensions in Russia, Syria and North Korea, according to Intesa Sanpaolo SpA, the best forecaster for the metal last quarter.

Prices could take a v-shaped path this year, with a swoon coming mid-year as the Federal Reserve raises U.S. interest rates, said Daniela Corsini, an analyst at the bank. Gold will likely bounce back by year-end, reaching a high of $1,350 an ounce in the fourth quarter, she predicted.

That would leave bullion at the highest level since September. Prices have risen 12 percent this year, supported by inflation concerns and a mix of geopolitical worries, including North Korea’s nuclear ambitions and U.S. airstrikes in Syria and Afghanistan.

“Markets will surely remain nervous about this uncertainty,” she said by phone from Milan on Tuesday. “And if economic data in the U.S. remains strong, then gold will regain its role as an inflation hedge.”

Read more at: Gold's Top Forecaster Says Prices May Hit $1,350 by Year-End – Bloomberg.