Further Explanation of " What's Reasons Behind This Highest Price of Gold ? "

Post by NGDlover


Here the explanation of chart given in article "What's Reasons Behind This Highest Price of Gold ?"

Growth in world monetary supply :
Years of easy monetary policies by central banks and now the trillions of dollars in economic stimulus to fight the global recession, it makes  .....

Inflationary Pressures :
Excess of cash in marketplace eventually tends to bid up prices for goods and services, so that.......

Declining Confidence in Paper Money :
The prospect of inflation lowers confidence in paper money as a store of value, leading many investors to buy gold to preserve their wealth. The result is.......

Higher Gold Price



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Volatile Stocks and Oil Prices :
After several bull market years, stock and commodity markets turn down dramatically in 2008 as the global economy slid into recession. While market have partially recovered from their lows, their remain volatile and many investors remain focused  on capital preservation. On the other hand....

Safe Heaven Appeal :
With other hard assets like real estate and commodities loosing their value, there was a revived appreciation of gold as a safe haven for investors seeking to protect themselves during difficult times. While....

Increased Demand for Gold :
The recession of 2008 created a large new class of gold investors. The strong demand exerted by this group, along with traditional gold buyers, drained the global inventory of gold coins and gold bars, thus driving up the price of bullion at a time of shrinking worldwide production. So, here comes....

Higher Gold Price

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China :
Gold has long been prized in China, which is one of the world's largest producers and consumers. Increasingly china's gold market has become more liberalized. Since....

Trade surplus :
China has a huge trade surplus with the U.S and Europe that generates vast quantities of foreign currencies. China also has one of the world's highest savings rates.When...

Rotation Into Commodities :
China buy's a considerable amount of U.S Government of debt, but it is diversifying its reserves by increasing its holdings of gold. In addition, China is pursuing investments to recycle its dollars into natural resource project. The result is ....

Higher gold price

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Low Gold Price in '90s :
After climbing as high as $850 an ounce in 1980, gold dropped as low as $252 an ounce in 1999. Then, comes the era when....

Cuts in Exploration :
Low prices and environmental controls discouraged mining companies from spending the money to find new supplies of gold. While....

Falling Production :
The lack of investment during the low price years means that new supplies of gold have not kept pace with global demand. It's significantly make the ....

Higher Gold Price

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Low Interest Rates :
When real interest rates are low, many investors turn away from paper assets with declining value and instead turn toward assets with real value, like gold. So...

Hedging Curtailed :
When interest rates are low, there is little incentive for hedging. As a result, gold is removed from the market. And then....

Less Supply :
A decline in hedging shrinks short-term gold supply, creating a market imbalance during a time of escalating demand. So, it happened now, the ....

Higher Gold Price


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Credit Crisis :
The U.S Economy has been hurt by tighter liquidity associated with heavy losses in the key housing and financial sectors, badly enough to make.....

Interest Rate Cuts by Fed :
The Federal Reserve has cut interest rates effectively to zero in an effort to lift the economy out of recession. It has an impact to....

Weaker U.S Dollar :
Rate cuts drive down returns for currency investors. Many of those investors will buy gold as an alternative reserve asset, thus driving up demand. Once again.....

Higher Gold Price

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