Since it has been nearly 7 years after the world financial crisis it would be logical to assume things would start to get better in economies in the world. But is that really the case? Is the world economy really recovering?
There are many indications both ways so the answer is really not that cut and dry. The price of gold can be used as an indicator if the world economy is recovering or not, however, the price of gold is largely due to demand. The demand for gold in countries such as China and India is still pretty high, but that demand has been wavering for a while now.
Due to some instability in the world there is a lot of doubt if the world economy will continue to recover. The economic sanctions against Russia have been putting a dent in the growth prospects for the entire Eurozone. Germany for instance is a major trading partner with Russia and these sanctions is hindering the growth in Germany and that is dragging down the entire Eurozone as a result.
As well, since Germany is one of the key backers for the economic bailout for Greece it is vital that one economy continues to grow otherwise the debt load of Greece will definitely weigh down any future progress. Greece will continue to be a drag on the entire Eurozone until either some settlement is reached or if Greece decides to leave the Euro and return to its own currency than some stabilization will occur.
Just watch the economies of Greece and Germany for any improvements or news to see if the European economy will recover. Clearly there are some bumps in the road ahead that both countries will have to navigate in order to really restore faith in that area.
The trouble in China is becoming apparent. Just like the western nations China is experiencing growth due to unrealistic and unmaintainable building projects in various cities throughout the country. There are literally cities popping up monthly with little to no people actually residing in them. Documentaries have been made on this issue and the Chinese government seems unwilling to stop this problem. Basically, it is the same rampant speculation that brought down the world economy in 2008 all over the country of China.
The ramifications of this rapid building out of China without any natural growth are yet to be seen. After all, China being a communist nation can inflate and misstate most of its financial forecasts or just plainly make things up and the rest of the world is just supposed to swallow it without question. Since China is such a driving force for many western nations it is clear some sort of fall out will occur. No one can really predict what will happen in that case.
The world economy is not doing as good as people make it out to be. Sure there are glimmers of hope here and there but the true recovery of the world economy is yet to take root. That is a good reason to put some if not all of your assets in a steady and world recognized commodity such as Gold.