Then may we suggest reading How the Gold Markets Work?
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Gold investments
If you are still thinking about investing in gold and pondering what can be a difficult decision, we recommend reading this link before investing in gold.
Overview of the gold investment market
Investment in gold around the world has grown dramatically over the past five years, but compared to total financial assets, investment in gold bullion is still a tiny fraction.
Currently, several factors are stimulating investment in gold from the money of new pension funds, as well as from private investors.
Demand in new gold investment markets
Sales of gold jewelry in Asia are growing as the local economy grows and private investment grows. Investment demand for gold in China rose by 20% in 2007, while Indian consumers bought a record 900 tons, more than one-fifth of the global market.
Gold buyers in Asia tend to think of their jewelry as a form of investment in gold. Having until recently been banned from owning gold bars, they invest in gold to protect their savings from inflation and currency shocks.
This is why the most popular form of gold jewelry in Asia – chunky chains and bracelets – is known in the gold mining industry as “investment jewelry”.
Mining is out of step with investment demand for gold
Gold mining companies around the world have been unable to meet the growing demand from buyers of gold jewelry and investments in gold, which has led to a steady increase in the price of gold.
The former world number one gold-producing country, South Africa, has halved its annual gold production since 1998, and new ventures in China and Russia, though growing, have not been able to make up for the fall.
Since 2003, total global mining production has fallen 4%, according to consultants Virtual Metals. Their gold investment analysts are not predicting a return to growing production soon.
Investing in gold against the falling dollar
As the US dollar plummeted, investment in gold outperformed all major world currencies.
In the five years to 2008, buying the euro to protect against a falling dollar brought in 47%. Investments in gold, on the other hand, returned 131%.
British, Australian, South African and Indian citizens who invested in gold in 2007 enjoyed the price of gold reaching a new all-time high.
When inflation rolls in, gold investment shines
The rise in the price of crude oil has almost matched the rise in the price of gold since 2003, but many people who are now thinking about investing in gold will also want to take into account the rise in world food prices, the boom in base metals such as copper, and the current economic situation. – time maximums of delivery costs.
The growing demand for better housing and durable goods from Asian consumers is certainly an important factor. But many gold investment analysts are also pointing to a huge increase in credit and debt in the West.
The money supply in the US has doubled over the past seven years. In Europe, money growth reached a nearly 30-year high in late 2007, boosting the appeal of gold investment as the value of each euro in circulation threatens to decline under the weight of new banknotes and electronic account balances.
Investing in Gold: The Antidote to Complex Debt Defaults
“Financial innovation over the past few years has been extremely strong and powerful,” said Gilles Gilsenstein, head of asset management at BNP Paribas, in late 2006. Now we see this bubble in complex and new investments bursting.
The global credit crunch began when the alphabet soup of MBS, CDO, CDS and ABCP soured as the US mortgage market turned around.
These tools thrive in the opaque, off-balance sheet environment of modern financial engineering.
But transparency is important. In today’s world, there are verified accounts, open exchanges, and “public” companies for good reason: because previous generations understood that when investments are no longer open and transparent and return to cozy secret deals, complex contracts, and big bonuses for executives, then ordinary people are being deceived. investors. Transparency helps stop these problems from developing.
In contrast to the growing complexity of today’s securities markets, investing in gold remains exceptionally simple and—when done right—uniquely transparent.