Commodities soared in 2008—including oil reaching a once-unthinkable $147.27 a barrel in July and gold shooting up to a record $1,033.90 an ounce in March—on a wave of unprecedented global growth, especially the booming economies in China and India. Meanwhile, the dollar fell considerably against other major currencies, making commodities all the more attractive as a hedge against the weaker greenback.
After setting its record March 17, gold dropped more than $300 an ounce to just under $705 in mid-November. The metal's path was a broken one, as investors were alternately attracted by its reputation for holding its value and turned away by commodities' tarnished image. At year's end, it was trading at about $875.
Gold is perhaps the biggest beneficiary in times of inflation and stock market volatility; the belief is that gold has more potential to advance than other investments. Jon Nadler, senior analyst at Kitco Bullion Dealers Montreal, expects gold prices to trade within a range of $630 to $980 an ounce next year, with average prices hovering around $810.