I have seen many different arguments as to the main reason gold prices rise. I think the best argument is that when there is an increase in investor demand for gold, the price rises. This seems very reasonable and intuitive. But perhaps a more elusive and important question is why would investors flock to gold? Here, there are also plenty of arguments; dollar weakness, stocks and bonds performing poorly, time of the year (seasonal), fear of a global currency collapse scenario, real interest rates falling, etc, etc, etc. Now all of these things can play a role in driving investors to gold, but what is the primary driver that investors might flock to gold is my question? .
investors do not flock to gold Russia India China buying without pushing the price up short the paper gold play both sides of the game some gold went missing here and there... the GOLD market can only be driven by FEAR, the fear of losing everything is much stronger state of being Greed is good. in Greed, there is no way to push the stock price higher when every one knows the price would go up and there is none seller. but for fear of not having gold and willing to just dump all the paper just to get a bit of gold, that is powerful, no one would get gold here. ( a bull one never sell) sound like a circular argument here hmmm
^ True, what moves the markets are fear and greed . If there's more fear than greed, price goes down. But when greed overcomes fear, then the price climbs. Gold is: a saf haven (hedge against currency devaluation and it's an emergency reserve asset), but it's also a speculation asset (some buy gold in the hope of collecting fat profits later) and, I also think gold has a great reputation as an attractive, reputable fashionable "item".
I think gold is also a car park. Property, shares, bonds, bank accounts, et al, at various times appear a bit risky; investors park their wealth in gold, physical or paper, knowing it is a store of value. Any capital gain is a bonus.
Investors do in fact flock to gold at times....in the form of paper contracts and shares. From what I've been reading for 2 years now, this is what largely moves the gold price. It's not possible that paper gold trading doesn't significantly affect the price. That's my understanding. If that's not true, explain in detain how this couldn't happen. .
Keeping part of money in gold you have nothing to worry about: you can be sure that your gold will retain its buying power even in the most difficult of times. It's a reasonable choice for long-term storage of wealth, especially if you choose trusted retailers and buy products offered by famous mints.
I would say Uncertainty... When stability is in question, gold is usually pretty stable. When there is stability, then the price heads down. Wealth preservation and uncertainty are the main reasons I've been purchasing gold.
i understand your point but it seems a bit counter intuitive. if you buy an ounce of gold for $1000 and sell it for $2000 has the value of the gold gone up or the value of the fiat gone down? if gold is widely considered to be 'a store of value' then it would generally be the value of the fiat going down as reflected by the buyer of your gold having to part with $2000 to buy the same thing you bought for $1000 i think of gold as a static unit, it's the amount of fiat needed to buy it or the amount you get for selling it that changes. what fat profits have you gained if the extra $$$ you sold your gold for over what you payed for it if those $$$ have lost their purchasing power? yes, you can make a profit sometimes but i think over the long term it is a much better store of value than it is a profit base.
^^^^^^^^ What he said~Genius If you hold the Gold you have just survived an inflationary whirlwind REDBACK
