Of all the precious metals, gold is the most popular as an investment. Investors generally buy gold as a hedge or harbor against economic, political, or social fiat currency crises (including investment market declines, burgeoning national debt, currency failure, inflation, war and social unrest). The gold market is subject to speculation as are other markets, especially through the use of futures contracts and derivatives. Gold price has shown a long term correlation with the price of crude oil. It explains why gold is sold off during economic weakness contrary to what most people generally believe. It is unknown why something that has almost no industrial use should behave like an important industrial commodity. However if gold-oil price correlation continue to hold, gold price will appreciate over time due to Peak oil.
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