Gold has for centuries been considered to be a valuable form of payment. Countries have literally fought and died over who had the right to control a gold mining area. Thousands of people have died trying to get this precious metal out from the ground to increase their own wealth or the wealth of their slave owners, or employers.
Today Gold is traded on the open market. The price at which it is sold is called the spot price and these changes on a constant basis; you can monitor the change in the price of gold using various websites and apps that are free. There are many determining factors that go into the price of gold and it seems like the strength of the global jewelry market is a definite driving force.
There are many indicators that speculators use to determine the strength or weakness in an economy. The price of gold, silver, and other precious metals is definitely one of them. While some may see this as the canary in the mine so to speak there are others that have the ability to see that gold prices doesn’t necessarily correlate to the overall strength of the global economy.
While we are living in a highly connected and global society there are many factors that come into play when determining the price of any good or service. The strength of one economy can alter the price of a commodity and its relative supply in the marketplace.
For instance, it has been shown that the global economy has been going through some turbulent times and as such the supply of oil has been on the rise due to the lack of demand. This change in the price of oil has been said to be a foreshadowing to the lowering of the price of gold. Honestly, these may be too unrelated commodities but the underlying forces that drive the price of both remain the same. Clearly, there is something going on to slow the world economy down and this has negatively affected the price of gold in the marketplace.
The buying power of those in India and China will determine greatly the price of many precious metals. In these countries it is pretty common to use gold to show off wealth and also to use in various rites of passage such as a wedding or even a graduation. Many people who forecast the price of gold now look to the demand in China and India as a driving force.
Despite the fact that we live in a global society ruled by the transactions conducted over the Internet the power of gold will remain the same as it has for centuries. Even the rise of various crypto currencies is not going to diminish the power and allure of this precious metal. It would take a big shift in the psychology of the world to move over to some other form of currency to unseat the stability and buying power of gold.
Clearly, if you want to invest in a stable and long lasting form of currency Gold is where it’s at. Many a couple centuries from now that won’t be the case but that is debatable.