The scarcity of gold has always influenced the demand curve for the commodity in the global market. The demand is currently much higher as compared to previous years, with most traders seeking the commodity in the form of gold coins and gold bars as well as in electronics. It is actually a form of world currency in which most people take pride.
It is estimated that there are 165,000 metric tons of gold in the world market with China and India being some of the world’s largest gold buyers as they dedicate the precious metal to jewelry and electronics. The global demand for gold is controlled by different forces, among them central bank reserves and individual gold coin investors as well as the jewelry industry and other technological fields.
These buyers are affected by different market factors which in turn affect the demand and supply curves of gold, making it even more valuable. The fact that gold remains a global trading asset has made it stronger as compared to other commodities in the market. The buying and trading of gold is allowed across boundaries, an occurrence that is not common when it comes to other forms of assets and commodities.
The price trends of gold are compared in relation to the different currencies that are performing well in the markets globally. Therefore the price of gold does not rely only on the US dollar, although most people may tend to think so. The investment trends are another major aspect affecting the demand and supply behavior of gold. Investments come in the form of gold options, gold futures as well as ETF’s and are believed to have a great impact on the supply and demand curve, mostly for gold coins and gold bars.
The macroeconomic factors also determine the supply and demand of this precious commodity, which has a tendency to affect gold prices. This is the same case with the gold market trends which cause the increase or decrease of gold prices. Over recent years, gold prices have proven to increase even with global economic factors showing a downturn.
The value and demand for gold is expected to continue to increase as more and more investors and interested institutions pursue this precious metal. The gold market will always have willing sellers and willing buyers regardless of the economic factors which affect the demand and supply of the precious metal.
Showing posts with label gold trends. Show all posts
Showing posts with label gold trends. Show all posts
Tuesday, May 24, 2011
Wednesday, June 30, 2010
Gold Investments
The gold prices recently touched an unprecedented level of $1,254. The trend of this price rise has however, been going for some time with the constant upward revision of support levels. The key question arising here is how stable is the trend? More generally, how safe is it to stay invested in gold?
Experts from the financial sector of the likes of George Soros are betting against quick recovery from the current delinquent state of the markets. They are of the view that it is still quite some time before it stabilizes. This is the major reason behind the flow of funds into gold in the form of bullion and other related products as gold ETFs.
A top Swiss asset manager reported that most of his rich clients were interested in wealth preservation during the crisis. This means that the bigger players will support any fall in the prices. In addition, people who wish to keep the prices in vigil would put in steps to check runaway prices for the precious metal. Summers being the holiday season for most of the financial planners and asset managers, the period is not likely to witness any increase, if not a fall. USAGold however, has reported that gold prices shot up at an average of 11.3 percent for the past 9 years. Also, the approximate growth from the fall i.e. June-July, to the end of the year has been 17.3 percent for the same period. Going by the trends, the gold prices can be expected to be a little less than $1,500 by December 2010.
Interestingly, there is a counter-view regarding the reliability of gold. Some foresee a fall in prices if a collapse similar to the one in 2008 returns to haunt the markets. The reason has been attributed to the possible requirement of liquidity covering in the event of cash-crunch. Still, the decline may not be as drastic as the other sectors.
Although the junior gold stocks and investments in other base metals were totally drowned during the 2008 collapse, these products have shown great resilience in 2009. According to an analysis by Lawrence Williams, if the market can be expected to stay anything better than going negative and gold to remain strong, the junior stocks are likely to provide the best of gains for the times to come. He insists that although the gold stocks have been reported to underperform during high times, they also proved a safer bet during the times of crisis.
Experts from the financial sector of the likes of George Soros are betting against quick recovery from the current delinquent state of the markets. They are of the view that it is still quite some time before it stabilizes. This is the major reason behind the flow of funds into gold in the form of bullion and other related products as gold ETFs.
A top Swiss asset manager reported that most of his rich clients were interested in wealth preservation during the crisis. This means that the bigger players will support any fall in the prices. In addition, people who wish to keep the prices in vigil would put in steps to check runaway prices for the precious metal. Summers being the holiday season for most of the financial planners and asset managers, the period is not likely to witness any increase, if not a fall. USAGold however, has reported that gold prices shot up at an average of 11.3 percent for the past 9 years. Also, the approximate growth from the fall i.e. June-July, to the end of the year has been 17.3 percent for the same period. Going by the trends, the gold prices can be expected to be a little less than $1,500 by December 2010.
Interestingly, there is a counter-view regarding the reliability of gold. Some foresee a fall in prices if a collapse similar to the one in 2008 returns to haunt the markets. The reason has been attributed to the possible requirement of liquidity covering in the event of cash-crunch. Still, the decline may not be as drastic as the other sectors.
Although the junior gold stocks and investments in other base metals were totally drowned during the 2008 collapse, these products have shown great resilience in 2009. According to an analysis by Lawrence Williams, if the market can be expected to stay anything better than going negative and gold to remain strong, the junior stocks are likely to provide the best of gains for the times to come. He insists that although the gold stocks have been reported to underperform during high times, they also proved a safer bet during the times of crisis.
Subscribe to:
Posts (Atom)
