Investing in gold is safe investments that investors resorted to in difficult times by fear of the deterioration of the value of their investments in other markets. Although this is why the major causes of buying heavily on gold investment, but there are a number of other reasons that will push investors to move toward gold.
In these days is witnessing the highest increase in gold price since the beginning of history, where the price of an ounce barrier approached $ 1600 USD/troy an ounce in some international markets. Is Increasing demand for gold behind this rise, or are there other factors lie behind the payment price to the highest levels historically?
Supply and demand.
According to the rule of supply and demand, the increase in demand for a particular commodity pay necessarily to raise the price of that commodity until you get a state of equilibrium where the demand level with supply and thus proves price at a certain point, that comes a new wave of imbalance between supply and demand occurring among price either down or upwards as a result of this imbalance. But what is happening these days of rising gold prices to Ayazy mainly to an imbalance of supply and demand. In the third quarter of 2008 gold demand was higher than in the third quarter of 2009 by 34%, according to the World Gold Council data. Despite the difference in the increased demand for the period in 2008 when the highest prices ranged reached gold in the third quarter of 2008 about $ 1000 per ounce. A fact that can be invoked in the demand for gold was the main reason behind the approaching price of $ 1500 barrier recently.
Lower interest rates on major currencies
In cases of instability in the financial markets, investors seek to liquidate their investments and anticipation for the future stage is the selection of appropriate investment. Since the liquefaction necessarily mean keep money in cash in bank accounts and therefore get the benefit of those filings, the time now is considered unsuitable to hold such amounts of liquidity, because the interest rates on major currencies World no longer meet the ambitious yet ongoing reduction to her by the supervisory authorities As part of the economic recovery plans. And it becomes a trend for gold is more profitable to keep the money in bank accounts.
Lack of confidence in the global financial markets
Can not say for sure that the conditions experienced by the global financial markets are recovering, but it can be ascertained that the instability is prevailing since the outbreak of the global financial crisis. This is evidenced clearly oscillating trend of global indicators that are to receive news raises the value only and receive news again plunged them again. Under this state of instability or uncertainty as is customary in the science of financial analysis, investors prefer to go about investing in gold as if it were a safe haven saves money from corrosion.
Lack of confidence in economic performance
Although some of the major economies global indices rebound in the third quarter of this year, such as the two economies are the German and Japanese, additions to register good growth rates in emerging economies such as China, India and Brazil, but they are all combined to barely equal to the size of the U.S. economy, which has already been around the world and beyond. Has shown indicators of the U.S. economy last case of mystery enveloped much of the lack of confidence after more than a year after the outbreak of the global financial crisis and the U.S. Treasury incurring more debt, with no evidence of the efficacy of the economic reforms pursued by the two departments American past and present. All of this is necessarily reflect negatively on the future vision for the performance of the global economy, which is the base engine for the global financial markets. Thus, the trend for gold investors in spite of its high price may be justified, in part, a result of the vision blurring of the global economy.
Erosion of the dollar’s status as the global currency
It is known that the dollar is quite the first currency in international transactions, which is the main player in the pricing of gold. When there is doubt about the U.S. economic recovery with increased indebtedness of the federal treasury, as well as a lower interest rate on the dollar, it undoubtedly will play and those factors combined to raise the price of gold in the world. It is enough to know that the U.S. dollar has seen since the days of the lowest low against the Japanese yen in 14 years as a result of image motion blur, which damage the U.S. economic performance.
Political events and their repercussions on the economy
The political instability of the main reasons that support economic instability. Security and safety of the constants of economic prosperity. In light of the rapid political events around the world, places the burden rests with the largest economic recovery, which suffers as a result of the crisis. What remains contentious political spots exist around the world, and still these foci in a state of complexity day after day. Iran’s nuclear case file at the stage became tense after Tehran refused, one of the largest producers of oil and gas in the world and proposals Atomic Energy Agency and the threat of 5 +1 countries to impose sanctions on Iran’s largest. On the other hand, is still the issue of Arab-Israeli peace a standstill and even experiencing complicated growing due to take far-right prime minister of the Zionist entity, and still nuclear North Korea stalled also with the increase in tension between the two Koreas, as well as still the Iraqi scene bleak with the emergence of the features of the withdrawal of U.S. early accompanied by controversy constitutional Mtajaj between the various parties, while still NATO see more losses in Afghanistan with the significant expansion of the influence of the Taliban conjugated with farce presidential election that returned Karzai again. In Nigeria, there are still rebels attacking pipelines and oil tankers. The government is still facing the new Somali bloody conflict with the opposition may settle at any time for the last and the Horn of Africa makes it a safe haven for many of the Islamic groups fighting. In the final analysis: still U.S. President Barack Obama is unable to implement the promises made by the majority before the election, in spite of receiving the Nobel Peace Prize versus those promises and implemented before!
In light of all these data, although it may seem contradictory factors, and the possibility of its continuation in the future, it can be predicted that the price of gold could see waves rising again if it continues Seen factors referred to.
gold is gold in any circumstances, because gold is the safe investment