Where will it stop....The GOLD rush....
Discussion
NoelWatson said:
auditt said:
Where will it stop....The GOLD rush....
When the vast majority of the developed world thinks it can only go one way. Much like propertaayIs there an asset class that has badly of late? The joys of lots of money floating around looking for a home.
Gold has to be found, mined and processed, money is just debt printed on a big printing press.
Which is easier to make more of?
With FIAT economies in trouble, and inflation (QE) looking like an attractive way out why shouldn't an asset that actually has to have some real work done to get it be worth more?
Which is easier to make more of?
With FIAT economies in trouble, and inflation (QE) looking like an attractive way out why shouldn't an asset that actually has to have some real work done to get it be worth more?
Gold, while not finite is a restricted resource. It isn't like equity markets or bond markets where liquidity naturally increases with long or even medium term demand.
There are two main factors at play in the market currently. One is conventional and the other could be deemed 'new'.
Firstly, economic uncertainty drives investors to park an element of their wealth in gold. In recent years the advent of products like the gold ETFs can be argued to show that more regular investors are taking part in this action that historically would have. Historically, this was not an action the man in the street partook of but increased general wealth, a maturing Western population and the creation of more efficient ways to gain exposure than just hoarding physical are almost certainly amplifying the trend.
Secondly, there are certain economies which have a much, much stronger natural demand for gold as a store of wealth. India is the prime example. Many texts cite that historically gold would arrive in Spain from the New World and migrate through Europe's trade network taking less than 20 years for that very same gold to ultimately arrive in India. Where it stays as a rule. Indians of all backgrounds and status will look to store wealth as gold as it is the purest currency and when made into jewellry is easily transported in times of trouble.
If we look at India today, what we see is a massively growing population and massively growing wealth. The growth in population alone, applying historic gold ownership levels outstrips the growth in gold being dug out of the ground. Include then the growth in welath so that people are buying more and there is a strong arguement that this second element is and will underpin a strong market price for gold.
Western gold will be dumped the moment that sentiment turns but this second factor could be argued to mean that the expected crash would not be big, just a correction.
There are two main factors at play in the market currently. One is conventional and the other could be deemed 'new'.
Firstly, economic uncertainty drives investors to park an element of their wealth in gold. In recent years the advent of products like the gold ETFs can be argued to show that more regular investors are taking part in this action that historically would have. Historically, this was not an action the man in the street partook of but increased general wealth, a maturing Western population and the creation of more efficient ways to gain exposure than just hoarding physical are almost certainly amplifying the trend.
Secondly, there are certain economies which have a much, much stronger natural demand for gold as a store of wealth. India is the prime example. Many texts cite that historically gold would arrive in Spain from the New World and migrate through Europe's trade network taking less than 20 years for that very same gold to ultimately arrive in India. Where it stays as a rule. Indians of all backgrounds and status will look to store wealth as gold as it is the purest currency and when made into jewellry is easily transported in times of trouble.
If we look at India today, what we see is a massively growing population and massively growing wealth. The growth in population alone, applying historic gold ownership levels outstrips the growth in gold being dug out of the ground. Include then the growth in welath so that people are buying more and there is a strong arguement that this second element is and will underpin a strong market price for gold.
Western gold will be dumped the moment that sentiment turns but this second factor could be argued to mean that the expected crash would not be big, just a correction.
Zip106 said:
Being (very) late to the party, how does one go about purchasing gold?
Do I need to buy shares in a gold mining company or just find a fund that invests just in gold.
Genuinely need/want to know!
Thanks.
the simplest ways are spreadbet/cfd, buy an ETF or buy physical gold from a reputable gold dealerDo I need to buy shares in a gold mining company or just find a fund that invests just in gold.
Genuinely need/want to know!
Thanks.
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