why has gold prices risen so much in recent times?

Question

the last 3-9 months (or whatever that period is).

The dollar does on seem that weak (inflationary) to cause gold to kinda double in price.

Uncertain times? have'nt we had many many more severe uncertains times then what is happening currently? or are we more sensitive/aware about uncertainity now?

Answer 1

Gold and oil are denominated in U.S. Dollars, and inversely proportional in price.

Through most of this decade, you've seen a steady erosion in the Dollar, as the price of gold and oil have risen.

Other Reasons
Now that central banks of foreign countries like Switzerland and Great Britain have stopped selling tons of gold, the supply has lessened while the demand has picked up.

Once price launched into an uptrend, others escalated it.

More Reasons
This is the scariest market I've ever seen in the 20 yrs I've been watching it. Just name one thing that is stable; can't do it. The escalation in the price of gold is partly due to a flight to safety.

More Reasons
If you were Sadam Hussein or Osama Bin Laden, where would you invest your money if you were trying to destroy the economic centers of the world, and your own economy was at risk? If you were a Russian politician bilking hundreds of millions out of the foreign loans from other countries, where could you possibly hide that money where it is safe?

What currency is good in all the world, doesn't vanish when burried or tarnish or waste away or burn or get eaten, and has a base value through which it cannot go? Gold.

Answer 2

When times are uncertain, gold always makes people more secure. Shaky stock market, high fuel costs, Middle East unrest, fears of inflation, etc; Always when the world starts to look like this, people turn to gold. If you go back through time and look at the state of the world and compare it to gold prices, there is a correlation between gold prices rising and uncertain geopolitical forces. Gold is a fixed commodity, and a very old means of accumulating and storing wealth. There won't ever be any more than there is now. Oil is bulky and messy. It is not a good means of storing wealth, and as an individual it is highly impractical as a means of bartering for other goods and services. Diamonds, real estate and other means of storing wealth work well also. Get some today. Yummy and nutritious.

Answer 3

Gold enthusiasts won't usually admit this, but gold has been driven by a speculative bubble! Enough people see others making money in gold, and want to get in, that the increased demand drives up the price. Still more people see it going up, and so on. Eventually people realize this can't go on, they start to sell, and the price collapses. The principle is the same as the dot-com bubble that burst in 2000. At the time, people had all kinds of plausible sounding reasons why the stock market should go up forever, and now they're saying it about gold. They were wrong then, and they're wrong now.

Answer 4

Do a search on: "price of gold rising" you'll get some very interesting information....


Gold prices historically rise when faith in paper currencies erodes, as investors seek the intrinsic value of gold to protect themselves from inflation.

It's interesting to note that while the U.S. dollar has regained some of its value relative to other paper currencies like the Euro, it continues to lose value relative to gold and other hard assets.

What does this mean for you and your family? Since your dollars have no intrinsic value, they are subject to currency market fluctuations and ruinous government policies, especially Federal inflationary policies. Every time new dollars are printed and the money supply increases, your income and savings are worth less. Even as you save for retirement, the Fed is working against you. Inflation is nothing more than government counterfeiting by the Fed printing presses.

Answer 5

Safe haven and inflation hedge. Surveyqueen2, williegod, and steven s explained it very well. Very simply the more people that buy it for protection the more it goes up. Be sure to keep in mind, prices for any investment is not intrinsic value but perceived value. The majority of any price is determined by the investors expectation of what will happen. Great example: how else do you explain stock of companies that make no money moving up so much at times, Like some Internet stocks in the late 90's?

Answer 6

Outside of the US, gold has always been seen as a nest egg and hedge against the collapse of an economy. In addition, the growth of the electronics industry and the modernization of China has driven demand up.
As with any comodity, the price is driven by the law of supply and demand. Gold is a rare resource with little elasticity. As the demand increases the prices increases.

Answer 7

A confluence of factors seem to be feeding gold's gains. To start, concerns about rising inflation due to higher energy costs have contributed to the rally. Gold is also considered a "safe haven" investment during uncertain economic or political times.

see source for more info

Answer 8

there are number of points for that
1. Every central bank in a country keeps gold and sells it depending on the market economics.
2. it has a high liquidity.
3. India is one of the biggest market of Gold.its the biggest consumer in terms of volume. So since the markets were doing good in last 5-6 months , the central bank buys more as it has more reserves since our economy is on a growth track
hence rising prices of gold

Answer 9

not only gold many commodities have gone up. The main reason is increased money in circulation all over the world. Natural disasters (Sunami, earth Quakes), WAR etc has made govt to spend lots of money to rebuild the world.

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Answer 10

Because of Hedge Funds.