The Golden Run

Gold prices has always been a topic of interest to the average person that chooses to buy and sell gold jewellery once a year to the serious investor who hoards tons of gold in some cold dingy vault located somewhere in the remote Siberian plains. Gold, for some reason has mesmerised people for thousands of years not only because of its aesthetic desirability, but also due to the fact that money inertly know that it seems to be the only ‘money’ that has tangible value attached to it because of its scarcity.

The Golden Run

Although this is true, everyone has heard stories of gold buyers investing only to loose out because gold prices have fallen, and we cannot deny the fact that those who did buy after gold crossed the $1,700 dollar mark in 2011 out of panic are poorer by 500 dollars for every once that they own, provided they still own it, how about those who bought it at $700 or $500 per ounce a few years before 2011? Are they not richer? The fact is that, there are more people who own gold purchased at very low prices over the years than there are people owning gold purchased at $ 1,500 per ounce in that short bull run in 2011.

By factoring in the law of averages, those who buy gold during calm economic climates such as it is now (although everybody is aware that a nasty economic storm is brewing), would be able to manage the impact of the upcoming economic crisis, those who do not, might find themselves buying gold on the upward waves that would come down quickly and end up being trapped. As they say, it is better to have a gun and not need it, then to need a gun and not have it, only in this case it is better to have a significant amount of gold stashed away somewhere and not need it, than to need it and not have it.

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If we look at the entire scenario from a global perspective it becomes evident that the demand for gold jewellery has been increasing at a whopping 34% year on year and at times even driving prices up and affecting demand for investment which falls when prices are up, and the current volume on demand averages at slightly lower than 17% and it has been so since 2010 which does not mean that it is a negligible figure based on the fact that demand of for gold in general exceeds 900 tonnes annually and half of that demand comes from Turkey, India, and China and more recently Russia has joined the fray.

China’s demand for gold has more than tripled, Russia is in close pursuit and India although status quo, takes up the bulk of it due to the huge population’s obsession with the precious metal and jewellery.

Thank god though for the existence of recycled gold and cash for gold recyclers, which cater for 35% of the global demand, without which, prices of gold would be transcending into uncharted territory!

Post Author: Pooja S

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