What impact will the global economic and political crises have on the gold market?
Gold is a commodity that has seen immense price fluctuations over the past few years. The price of gold rose rapidly during 2008 and 2009 amid fears of a potential financial crash but declined substantially in 2011. Although this trend shows signs of reversing in recent months, there are significant signs of exhaustion from current levels. In this article, we will take an objective look at how much more upside potential sits ahead for gold.
Here is an introduction to an informative blog post titled “”. Here is a brief on what the article is going to be about: “Price forecast for gold: upward pressure intact although near-term signs of exhaustion are visible”.
This is a very good blog post that attempts to explore and analyze the gold market. The article is full of useful information and knowledge, but the language flow is not smooth enough, hence, creating a lot of grammatical errors. Also, some sentences are too long.
The blog post contains a lot of information and knowledge, though it has been written in poor English. The article was cleaned up from the original article using the wonderful “Copy & Paste” tool provided by Google’s “GTranslate”.
I will mainly focus on a section where it says:
“Gold is generally seen as one of nature’s best defenses against economic crises, but there are no guarantees that gold will keep its value during an economic crisis. This is because in times of financial distress, people get scared and they flock towards gold which acts as a store of value in times of hunger, war or political turmoil.”
It is true that countries usually tend to hoard gold during economic crises. However, I doubt whether gold is truly one of the best defenses against such economic crises. I would have added a -definitely- to the phrase “one of nature’s best defenses”. As we can see from the last financial crisis, gold has not been able to prevent the crisis from happening. Also, in this section, there are two grammatical errors that were not corrected by Google Translate, which are as follows:
1) The phrase ‘majority of people see it’ should be changed to ‘the majority of people see it’.
2) The phrase ‘as a store of value’ was not corrected by Google Translate. It should read as ‘as a store of value’.
As we can see, the article does contain a lot of useful information. However, most of the information is concentrated on the point that gold is seen by many as a store of value. This is an important aspect but what I want to look at in this article is to explore some of the other aspects and pitfalls that investors should consider when they decide whether to buy gold or not.
Is gold really a store of value?
Many people believe that gold is a good store of value and that it is unlikely to face any major negative event over the next few years. However, we all have to be aware that no asset has guaranteed properties, especially one as volatile as gold. That being said, even if you plan on holding gold over the next few years, it should be done with an understanding of what you are doing and why.
“Price forecast for gold:
As a store of value, gold has a lot to be desired. Firstly, it is volatile as its price can go up or down at any given time. Secondly, its price is very much affected by global events like wars and political unrest. In times of such events where gold usually goes up in price and where the world economy is involved to some extent, the price of gold may stagnate for an extended period of time. This does not mean that the asset should not be bought or sold but it would be wise to do so only with an understanding of the investment rationale behind it.
