2012年7月5日 星期四
Gold Price Influence
Gold is a safe heaven investment against inflation and economic uncertainty, this is the reason we have been seeing gold rising steadily in recent times. Since gold is traded in US currency, it is also directly influenced by changes in the exchange rate and a weaker US dollar usually means an increase in gold price. This is true because investors choose to sell US currency and buy gold with it in order to protect their assets as the US dollar continues to decline.
Supply and demand of physical gold also has a great influence on gold price. India and China are by far the biggest consumers of gold in the world, and the demand for jewelry and bullion at any given time will drive gold in either direction. The people of India have a longstanding tradition to accumulate gold jewelry as a sign of wealth and as these countries become more powerful and prosper, the physical demand for gold would be higher.
The political and economic situation in the world also has an effect on the price of gold. During the recent recession when the interest rate dropped to near record low levels, the price of gold has been steadily on the rise.
Tensions in the Middle East also have a direct effect on gold prices since gold is highly influenced by other commodities such as oil., the sad truth is wars drive economies and while most governments would never admit to it, wars are very profitable and necessary to sustain economic activity and increase global wealth.Article Source: http://EzineArticles.com/4897955
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