The dynamics of growth and decline in gold prices

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The dynamics of growth and decline in gold prices

Gold as a tool of the trade

Gold – yellow precious metal . On sale of finished products impossible to find a product made ​​of pure gold, as the metal is in its original form is very fragile and it is very easy to damage , just scratches . Therefore, all products including coins , carefully added impurity : copper, silver, palladium , zinc or nickel. Almost pure , with a mass fraction of 99.9 % , gold can be seen in the form of ingots . It is these bars are the most attractive tool of the trade .

Why is investing in gold?

Gold – is a kind of measure of value . Perhaps, it is the oldest known precious metals that people began to use as equivalent to the reference value of any product , a symbol of wealth. Have gold – so be solvent man. In addition, gold does not corrode and does not lose its properties , which makes investments in its purchase even more attractive .

Who determines the price of gold ?

More than three hundred years setter price of gold remains the UK, and specifically its capital city – London . Twice a day, adjustments are made the unit cost per troy ounce of gold ( 1 troy ounce – the gold standard measure of weight ) , but what price in other countries and in the Russian Federation in particular, is now determined by the difference in exchange rates.

What determines the price of gold ?

The price of gold – fickle thing . Changes in the price of gold is a direct consequence of the situation in the global community , and also depends on the cost of a barrel of oil or other minerals.

Dynamics of prices for gold

For the first time the price of one troy ounce of gold found at the end of the eighteenth century, in the amount of 19,3 USD, and it lasted about the same level until the beginning of the twentieth century . Between the world wars, the price per ounce is slowly but surely began to grow and has reached 35 USD. In the second half of the twentieth century, the gold price has been extremely volatile , and the value has steadily continued to grow , reaching a 2000 level of around 300 USD per ounce.

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The dynamics of growth and decline in gold prices

Beginning of the twenty -first century was rich with a variety of world events : an act of terrorism in the United States , the devastating natural disaster, a default in Greece , the events in Iraq and armed conflict have had a tremendous impact on the value of gold.

There are several theories as to why gold is getting cheaper .

The founders of one theory , it is believed that the price of gold is only masterful playing the so-called London fixing . That is, the representatives of the London quartet artificially manipulate the price of the precious metal . Official confirmation of this version is , of course, has not received.

Another theory says that during the global economic crisis and the general instability of many investors preferred to invest their money in the so -called risk-free assets , which include gold , as the situation in the global financial market has made all sorts of predictions stock price of various corporations fairly adventurous . Besides, investors were buying gold futures , hoping to increase the rate of inflation and , consequently, an increase in the gold price. Weather , however, is not justified. At the beginning of the second decade of the XXI century, the price of gold reached a record high in 1920 USD, but promised there was no inflation , and investors in a panic began to break free of the acquired assets, causing a drop in gold prices.

And on top of that , some countries have started to sell its gold assets, such as Cyprus , which is not helped to maintain the high price of gold.

Gold price rises again ?

Be that as it may, in the second half of 2013, the upward trend in gold prices appeared again and the forecast price of gold once again become favorable. Leading analysts attributed to the rising cost of gold with the rising cost of a barrel of oil and other minerals, which arose due to the ongoing instability in Libya.

In addition, the fall in the value of gold has brought huge losses to gold mining companies , forced to further reduce some production rates , which will also lead to a rise in the cost of available metal.

And, as world experience shows , a sharp decline in asset prices leads to an even more dramatic increase , so at the present time , according to experts , the rise in the gold price is just beginning. And investors are buying physical gold and gold futures with new rates , because at all times, this type of investment was a sort of ” safe haven” that ensured the relative safety of the capital . And if, for serious investors to buy gold can be a financially viable operation , then the ordinary members of society is a guaranteed contribution to their future and the preservation of savings.

Where can I buy gold?

Buy gold may be a citizen – as in the form of bars or in the form of coins – from any bank involved in the sale of gold, including abroad. Bought gold more profitable to leave on deposit with the same bank , in which it was purchased , as in this case, the purchase is not subject to VAT . Sell ​​gold can be both banks and pawnshops .

In any case, the choice , in which to invest their own money and whether to trust the experts’ forecasts , is up to the final buyer .