Diamond & Jewelry News, Advice and Prices for Consumers
Diamond & Jewelry News, Advice and Prices for Consumers
August 17, 2010
The 2009 financial crisis has also turned out to be a gold rush. I understand that the dollar is very shaky, which directs investors towards other forms of wealth, but still it makes no sense to me that gold prices can become so steep in a time that everything is becoming cheaper and while consumers' demand is low in almost every aspect. I would like to know the logic behind this gold rush, which countries are promoting the increase of gold prices particularly and what is the prospect for gold prices in the near future?
August 25, 2010
Well, as for the beginning of November 2009, gold has reached $1100 per ounce and the trend is expected to continue in a price ascending direction. Throughout the history gold has often reached peaks of great demand while the public felt it couldn't rely on the financial system and the local currency. Though gold isn't the only substance or product which are "gaining power" during this recession. Copper, silver and even oil are becoming more pricey and still in high demand. The market recovery managed by the US Congress, aimed to save the market by forcefully injecting high amounts of money into the economy are arousing the fear of many educated investors, who want to be well prepared for a future inflation, which will inevitably lead to rising prices for all commodities.
Without considering whether gold has any industrial or even jewelry use, investors are regarding gold as the safest substitute for the shaky currency.
August 25, 2010
Gold prices are now very steep but the prediction that gold prices could reach a new height of $1500 per ounce by 2010 is only making more and more investors to consider purchasing the yellow metal. This is a good example of the media "announcement effect", in which a prediction or a trend is reported, making investors respond to the trend and thus the rise of gold prices are becoming a nation's self-fulfilling prophecy.
Anyway, every trend must come to an end sooner or later, the question is only when. Gold prices may indeed reach $1500 within 15 months, but the the recession recovery process is expected to suppress the increase of gold prices. Interest rates in the US are expected to be increased as the recession becomes less present, which would lead to less inflation and eventually (though perhaps with a long delay period) a suppression of the gold rush.
August 19, 2010
The Central Bank of India has purchased a huge 200 metric tons amount of pure gold lately, which reinforces the fact that India is one of the biggest gold consuming nations worldwide. While in the west much of the gold rush is a direct response to the dollar's instability, in India the passion for gold isn't something new and as far as I know is not a trend which has been induced by the global recession. Gold rising prices has actually reduced gold sales throughout India in the first half of the year, but it seems now that as the recession is becoming less eminent India could fulfill it's gold passion once again.
