Ed S asked: Everything is going up these days. Even though the oil price has come down a li’l bit, it has been hiking like whatchamacallit a while ago, and I think it can resume its upward pace any time soon. Economy is down. Inflation is high. So I guess people are prone to hoard up some gold in this situation. But the gold price is going down, why? Maybe it has come up too much for the last several years? Asked on: 2009-04-29 12:43:29 Tags: Business , Currency , Gold Price
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May 24th, 2009 at 9:52 pm
Why is the gold price going down?
Everything is going up these days. Even though the oil price has come down a li’l bit, it has been hiking like whatchamacallit a while ago, and I think it can resume its upward pace any time soon.
Economy is down. Inflation is high.
So I guess people are prone to hoard up some gold in this situation.
But the gold price is going down, why? Maybe it has come up too much for the last several years?
May 25th, 2009 at 2:54 am
When gold goes down so much, then it usually means that some big investors are selling a lot.
Some banks and hedge funds are in a lot of trouble nowadays due to leverage, bad bets, and requests from clients to withdraw their money from investment funds. Which means that they may have to sell good investments such as gold in order to cover their losses from bad investments.
When you get a margin call. Then you can’t use gold as money to cover your margin call. You need to sell the gold first. And you must sell it quickly, even if the gold price is down.
Perhaps when institutional investors stop believing that the worst is over for the economy. And they position themselves for a declining stock market. Then the gold price will start to recover.
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May 25th, 2009 at 2:56 am
The value of the dollar is increasing, which pushes the price of gold down. Don’t worry, with our government’s boneheaded economic policies, the price of gold will rise substantially with inflation.
Grandpa
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May 25th, 2009 at 2:58 am
Gold is an indicator of economic recession and depression. When investors are afraid that the markets are going to crash or are in that process they put their money in gold because they believe that it holds its value during tough times.
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May 25th, 2009 at 3:00 am
you could answer that buy asking why is gold priced so high?
It is only the price it is because someone wishes to pay and someone wishes to sell at that price.
if no one wanted gold then the price would plummet.
If your life depended on it you would pay even $10,000 an ounce if you had the money.
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