Discussion in 'Commodities Forum' started by wulfman, Jul 29, 2014.
The dollar is doing quite well lately.
The price of gold does fall from time to time but maybe not as dramatically as you might be talking. There are a number of factors that will affect the price of gold at any moment and some were mentioned in a previous post. Also the world economic situation will affect the price.
That's an excellent question. When one considers that all the gold that has been mined can fit in a couple Olympic sized swimming pools, it seems absurd that it wouldn't trade at a much higher valuation than it does today, but that's just not what drives this market. Gold, Sliver, Platinum, Palladium etc...trade as speculative assets, and currently gold and silver especially are traded for their value as protections against risk in other markets. So, if the overriding sentiment in the financial sector is that risk assets are a reasonable place to park one's capital, then gold and silver will be in low demand, regardless of supply. Also, it's important to realize that this is not simply based on the supply of physical metal, but rather derivatives of the metals like ETFs, options on ETFs, and the like. I do believe, however, that there could come a time in which this equation shifts, namely when the investment community senses risk in other asset classes due to fear in the currency and debt markets. When everyone begins to scramble for protection, the amount of physical supply may play a greater role in the valuation of the asset, and could quickly tip the supply demand ratio toward recognition that there really isn't much supply available to protect the assets at risk.
Hope that helps.
Gold was a little to overhyped for the past few years and now it is starting to cool down. Keep in mind, gold is doing much better than it was years ago.
In general it seems to be as the stock market goes up the price of gold goes up since bull market = more speculation / risk and gold is a safer investment
Sometimes, I never think!, I have never taken the time to realise that the above factors can actually determine the value of gold.
Hi there friend. The price of gold just like all commodities is based on supply and demand. Although there may not be much of it (gold) price only moves up when there are more buyers of the available source of gold than there are sellers at a given price. When there are more sellers, of course, prices will be driven down. I hope I've been helpful.
Thanks to all the oil shale out west; the dollar will go a lot higher, and for a couple of reasons. 1) The U.S. doesn't need oil from the Middle East anymore 2) The Japanese and others are about to start lining up to pay big bucks for our oil. It's good for any currency to have a positive trade balance even the U.S. dollar.
If you want to make money with metal investment during good economic times. You should invest in copper. It always goes up during good economic times, because that's when a lot of build and infrastructure projects get done. You need a lot of copper wire and pipe to build anything. There's a good book on the subject on Amazon.com "Good as Gold" about how to invest in copper.
There's a great book " Precious Metal Investing for Dummies". Read it and you'll be an expert overnight. I read it three years ago. It changed my life. Really informative stuff.
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