2006-10-22 19:21:50 · 7 answers · asked by vida 2 in Social Science ➔ Economics
i always thought the bretton woods agreement which came to an end caused it and then a series of events caused it too.
2006-10-22 19:25:29 · update #1
but gold cant fluctuate much.
could it be becos now the USD have become a standard currency and plus it's value has gone down so much so it would make it seem that gold is expensive when u exchange gold for it.
2006-10-22 19:37:54 · update #2
The price of gold had dropped to around 250 bucks an oz when England debased their economy from gold. They dumped 60 tonnes of gold on the market. As it has gotten redistributed the price has risen. Gold is a very stable investment. In the 1850's an oz of gold would buy a nice suit. Today an ounce of gold will buy you a nice suit. Inflation is what is changing.
2006-10-26 03:30:49 · answer #1 · answered by carolinatinpan 5 · 0⤊ 0⤋
Your statement has a judgment built into it. You judge the price to be high, but high relative to what? If you adjust it for inflation it is only about 1/3 its historical high price. There has been a substantial demand for gold and the supply is fixed by nature. All the gold that will ever exist already exists. Some has not been mined yet, but the majority of gold that will extracted has already been extracted.
At the same time, knowledge based production has radically increased the wealth of all nations while the supply of gold has remained fixed. As more and more nations become wealthy and as the dollar is weakened by continued borrowing by this administration, gold looks wonderful to many people. I personally do not hold gold AND it is not and never will be an investment. It is an insurance policy against currency failure.
2006-10-23 14:33:22 · answer #2 · answered by OPM 7 · 0⤊ 1⤋
look, demand and supply only are relevant in this situation b/c there is a perceived demand for this precious metal. If gold had not historically, for hundreds perhaps thousands of yrs, held enormous value in trade, then this wouldn't be the case.
Gold represents wealth and in no way in the foreseeable future will that change. So, if you want to know why gold has appreciated from less than $100 in the 1970's to over $700 just this year, then you can just look at the vast amount of capital flows into the gold market. Speculation will in gold will keep that commodity expensive just as the market does with crude oil.
2006-10-23 12:52:55 · answer #3 · answered by forex 3 · 0⤊ 1⤋
go to thebulliondesk.com find all your answers there....hint....india
i just read all there answers....NO...the gold did bounce high from oil..but that was only a short period of time...the oil scare cuased gold to hit 700 ounce for a little..and sometimes the gold will jump but oil is not a long term influence...i bought gold when it was 430 an ounce...the demand in india is the real fire behind golds increase...the true reflection of golds worth is about 550 in my opinion....price infaltion has not cuased 430 to 550 nor has oil scares....the biggest cuase of the most relalistic cuase is DEMAND along with supply...india is becoming the new consumer purchaser in the world and they have a huge appitite for gold..jelwery and all. go to the web site i gave...it is all there with upto date quotes....and for all the other guys are not completly wrong...but not completly right
also i have on e more thing to add...reading the last answer..she said gold will never be an investment....not true..although gold is a great hedger...I have invested in gold peice that also have historicl value and collective value...(like a baseball card) I have made thousands in investing in gold...you just have to play what is a good investment..like stocks...I notice that some people answer forgot about inflation rasing the price of gold....when it comes to the purchasing power of what gold was in the past to now adays it really has not changed toooooo much...just the nominal value. One more thing..lol...as far as gold making it to 700 dollars as a true reflection of supply and demand...I am not sure we will see that...only from relative inflation from oil and infltion of money can i see a nomail value of 700 dollars....but if you are a investor...look into rare curency...Ihighly recommedn buying the 1991 25 dollar eagle form our mint...that coin is servelry rare...selling around 1000 and over....in 30 years it will be the next indain head 1916-d.
2006-10-23 02:24:07 · answer #4 · answered by blacklion 2 · 0⤊ 1⤋
It's all about the demand and supply. As gold is a scarce resource, the demand for it is high, thus the price increases as the demand increases. If you think about Brent crude oil, the price was very high and has come down as the suppliers have decided to make more oil available, so, the supply has increased and the price has decreased. Same with Gold.
2006-10-23 02:31:34 · answer #5 · answered by cyber chick 2 · 0⤊ 1⤋
in U.S. it's the seesaw of the dollar. When the dollar goes down in value, you need more to buy gold.
2006-10-23 02:24:42 · answer #6 · answered by Anonymous · 1⤊ 0⤋
Due to inflation the price will go up and like wise due to physical demand also it will go up.Trade cautiously.Good luck
2006-10-23 02:32:27 · answer #7 · answered by king 4 · 0⤊ 1⤋