Gold continues to spark controversy, so much so that the market is becoming increasingly volatile. The price of gold is currently at its best for this year, and has been so for more than two months. If the week began with 1222 dollars per ounce, the prix de l’or stands today at 1286 dollars. The price of gold experienced a 5% jump; however, analysts are pessimistic. The price of gold did not exceed 1300 dollars until after two or three months.
Outcry over the June declines
In June, the decline recorded by the price of gold amounted to 23%, which is enormous. The European situation (still the main cause of this drop) is not at all lenient toward this market. Investors, however, continue to hold on and hope for a future rise, which occurred last week. Thus, we can once again assert that gold is a safe-haven asset, although it has always been one.
A boost from India and China ?
The decision of the Indian government aimed at reducing gold imports seems to have borne fruit. These imports were reduced by 80%, thus falling to 31.5 tonnes. That said, this decision strongly shocked traders, who hope that la filière will be active again in the coming months.
The sudden correction in gold was positive in China, following the statement by the Chinese minister. This country hopes for a 7% growth this year, even if market forecasts set the rate at 73%. It would seem that this country has, once again, reached its objective despite unfavorable forecasts.
The price of gold closely watched by the Fed
The excellent results of the gold market have led experts to think that the American central bank would reduce the scale of the bond-buying program in order to support the economy next September. This weighs on the price of gold, but it is unclear whether the balance will tip upward or downward. Investors can rest assured, this costly American policy (the bond purchases) must still be maintained for a few months.
Still an explosion in demand
Following this strong performance, demand is up sharply, notably with regard to physical gold. Analysts note a skyrocketing rise in the number of investors from Arab and Asian countries. In India, premiums have recently quintupled. The same is true for the United States. The US MINT recently sold nearly 210 00 one-ounce gold coins. Production of gold coins of the EAGLE type was halted because the mines could no longer meet consumer demand.
A secure investment accessible to all
Compared with other investments such as « stock purchases », buying gold presents no risk in times of financial crisis. The yellow metal is rarely subject to devaluation. Paradoxically, the price of gold continues to rise, mainly in recent years. According to statistics, the value of gold would have recorded an impressive 600 % increase over the space of a few years.
Also, the yellow metal remains a safe-haven asset for thousands of investors in times of economic slump. It is spoken of as an effective protection tool in case of inflation. The accessible nature of gold is also a justified reason that encourages market participants to invest in gold.
Gold can, indeed, come in several forms: powders, coins, bars or jewelry of all kinds. Anyone, individuals or professionals, can easily create their own business in gold.
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