houghts economic (9): Why gold has lost its luster
Gold prices began to decline in the global markets since the beginning of the month of September of this year. The price of gold fell to $ 1,274.90 per troy ounce in mid-June, which is the lowest of about three years. Gold recovers disease seconds to fetch up to $ 1,308.50 at the beginning of the month of August, but fell again at the beginning of the month of October for up to $ 1,210.78 per troy ounce. Most analysts believe that the price of gold may fall more in the coming weeks and months.
Statement of reasons for the low gold prices in the global market, we must know the interest of the acquisition of large quantities of gold. Why do investors buy massive amounts of gold? Affluent people buy gold for two important reasons beside women buy quantity of it for the purpose of adornment. The first function of gold is the safety of ordinary time, the economic downturn. Citizen who owns five kilos of gold feel reassured Azh much more than its neighbors, which does not have one whit of it. American investor and the European disease sell its shares and government bonds and the purchase of large quantities of gold in 2008 due to fears of an economic downturn, which hit the big economy and declining interest rates on their savings. All central banks are trying to protect their economies from the days of the economic downturn by buying large amounts of gold in order to protect their foreign exchange reserves. I arrived request central banks for gold the highest since 48 years in the days of the recent global economic downturn. The second function of the acquisition of Gold is the prevention of the effects of inflation. In a time of inflation rising gold prices to correspond to the rate of increase in prices of goods and services. When rising prices of goods and services increased by 20% (inflation), the price of gold is also rising by 20%, and thus maintains the real value of gold on the reverse and local money that is losing purchasing power by inflation. The local currency is losing its value when purchasing a 15% rise in prices in the domestic market by 15%.
Accordingly, when the fears of the economic downturn and the problem of inflation, investors and governments sell their gold and instead buy other assets they bring the greatest financial benefit. It was the first indication of the confidence of investors from not having the fear of inflation is the announcement of bin Brinkley Reserve Bank President former American entering his country's economy has been recovering leads to a decision to reduce the money supply, which would eliminate any hope of an increase in the rate of inflation in the country. Add to that is that the reduction in the money supply leads to increasing interest rates and bringing investment in stocks and bonds more attractive to investors than the hoarding of gold and other precious metals. Interest rate mirror opposite to the price of gold. A rise in interest rates leads to a decline in gold prices, while low interest rates lead to increased demand for gold and oil prices.
Next to the demise of the risk of rising prices (inflation), the economy is out of the American and European recession to recovery. The first signs of this recovery was higher purchases of materials manufactured in the United States, which led in turn increase demand for the dollar and the rise in its value in the face of other foreign currencies. The value of the dollar Zadeh from 82.75 to 84.28 in the month of September of this year. Thus, whenever the value of the dollar Zadeh in global markets as a lack of demand for gold and a shift to more profitable investment assets.
Improvement in the American economy and with the European control of the money supply leads to a rise in the interest rate, which amounted to the equivalent of zero during the period of economic downturn. Leaks decision the Reserve Bank of American thinking seriously to raise the interest rate on loans rejoice all investors in the world. News of the world united against the hoarding of gold and silver and other precious metals, and led to a rapid decline in prices. Is the price of gold will continue to decline? You can not rely on guesses and predictions because they sometimes may Takta or infect. But at this time, gold is definitely in the way of the abyss. One analyst came to the conclusion that the stock prices of companies producing gold has fallen much more than the price of gold then the product, and that before the gold-producing companies two choices, either to work on raising the value of its shares by 100% or acceptance by reducing the price of gold by 50%. Most of the stakeholders chose the second solution. Thus, if you are a God who preferred it and you have some money to invest, the better you'll postpone the decision to buy gold now, and the search for other investment, perhaps buy some shares of Iraqi companies or in real estate in one of the holy cities. It will be a profitable investment for a very long time.
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Gold prices began to decline in the global markets since the beginning of the month of September of this year. The price of gold fell to $ 1,274.90 per troy ounce in mid-June, which is the lowest of about three years. Gold recovers disease seconds to fetch up to $ 1,308.50 at the beginning of the month of August, but fell again at the beginning of the month of October for up to $ 1,210.78 per troy ounce. Most analysts believe that the price of gold may fall more in the coming weeks and months.
Statement of reasons for the low gold prices in the global market, we must know the interest of the acquisition of large quantities of gold. Why do investors buy massive amounts of gold? Affluent people buy gold for two important reasons beside women buy quantity of it for the purpose of adornment. The first function of gold is the safety of ordinary time, the economic downturn. Citizen who owns five kilos of gold feel reassured Azh much more than its neighbors, which does not have one whit of it. American investor and the European disease sell its shares and government bonds and the purchase of large quantities of gold in 2008 due to fears of an economic downturn, which hit the big economy and declining interest rates on their savings. All central banks are trying to protect their economies from the days of the economic downturn by buying large amounts of gold in order to protect their foreign exchange reserves. I arrived request central banks for gold the highest since 48 years in the days of the recent global economic downturn. The second function of the acquisition of Gold is the prevention of the effects of inflation. In a time of inflation rising gold prices to correspond to the rate of increase in prices of goods and services. When rising prices of goods and services increased by 20% (inflation), the price of gold is also rising by 20%, and thus maintains the real value of gold on the reverse and local money that is losing purchasing power by inflation. The local currency is losing its value when purchasing a 15% rise in prices in the domestic market by 15%.
Accordingly, when the fears of the economic downturn and the problem of inflation, investors and governments sell their gold and instead buy other assets they bring the greatest financial benefit. It was the first indication of the confidence of investors from not having the fear of inflation is the announcement of bin Brinkley Reserve Bank President former American entering his country's economy has been recovering leads to a decision to reduce the money supply, which would eliminate any hope of an increase in the rate of inflation in the country. Add to that is that the reduction in the money supply leads to increasing interest rates and bringing investment in stocks and bonds more attractive to investors than the hoarding of gold and other precious metals. Interest rate mirror opposite to the price of gold. A rise in interest rates leads to a decline in gold prices, while low interest rates lead to increased demand for gold and oil prices.
Next to the demise of the risk of rising prices (inflation), the economy is out of the American and European recession to recovery. The first signs of this recovery was higher purchases of materials manufactured in the United States, which led in turn increase demand for the dollar and the rise in its value in the face of other foreign currencies. The value of the dollar Zadeh from 82.75 to 84.28 in the month of September of this year. Thus, whenever the value of the dollar Zadeh in global markets as a lack of demand for gold and a shift to more profitable investment assets.
Improvement in the American economy and with the European control of the money supply leads to a rise in the interest rate, which amounted to the equivalent of zero during the period of economic downturn. Leaks decision the Reserve Bank of American thinking seriously to raise the interest rate on loans rejoice all investors in the world. News of the world united against the hoarding of gold and silver and other precious metals, and led to a rapid decline in prices. Is the price of gold will continue to decline? You can not rely on guesses and predictions because they sometimes may Takta or infect. But at this time, gold is definitely in the way of the abyss. One analyst came to the conclusion that the stock prices of companies producing gold has fallen much more than the price of gold then the product, and that before the gold-producing companies two choices, either to work on raising the value of its shares by 100% or acceptance by reducing the price of gold by 50%. Most of the stakeholders chose the second solution. Thus, if you are a God who preferred it and you have some money to invest, the better you'll postpone the decision to buy gold now, and the search for other investment, perhaps buy some shares of Iraqi companies or in real estate in one of the holy cities. It will be a profitable investment for a very long time.
[You must be registered and logged in to see this link.]
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