A Revista Cadernos de Cultura e Ciência é de caráter nacional e multidisciplinar, cadastrada com o ISSN 1980-5861.

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Economy in The Light of Rise And Fall of The Gold Price

por Fredric Slavin (2019-09-01)

Gold is considered to last forever. This is reason that it has attained an important position in the world economy. According to the figures collected after surveys gold price is an important factor in regulating the world business. During the time of financial crisis it is administered that gold price rises. In some cases the rise in the gold price can be erroneous and illusionary.

The rise and fall in gold prices are conventionally looked upon as a mirror of the current inflationary pressures. It is not always right; some times it may turn out to be a case of mistaken cause and effect. It would be too early to jump to conclusions. The postulates of the Long wave economic theory, which has established to be priceless for seeking into the historical trends distinctly, reveals that gold has faired out best at two points. It may interest you to know that these have been stated as under in the long term economic cycle at the peak of inflation in the final stages of the deflationary cycle

If we relate it to the present situation then we are facing the second situation, which is the deflationary cycle. At present the gold price is soaring high almost touching the sky. According to the trade gurus it would be intelligent to invest in gold before the gold price rise to a level that is far beyond the reach of the common man.

The most important and in fact the deciding factor that has a huge impact on the gold price is the weakening of the U.S. dollar. There is a popular thought afloat among the people that the gold price would raise when ever the dollar price drops. The alarm that the U.S. dollar will keep on to weakening has led to rise in the number of people investing in gold. With a directly proportionality relation, it has led to the amplification of the gold price. In accordance with the rise of oil prices, there has been an elevation in inflationary pressures, at a global level.

Inflation is considered to be the wearing away on the value of money. Dreading this, the people get inclined and move their money into comparatively stable, real assets like gold, which in turn gives gold prices a hike. It may sound new to you but threat of terrorist attacks also pay a pivotal role in changing the gold price. The investors tend to diversify regarding the chattels of good store value like gold. The most recent example that supports this theory is the attack that took place in the US. That attack on the U.S. may have crippled the economy, resulting in the lowering of stock and property price, it did not have a drastic impact on the price of gold. Thus people around the world consider it one of the safest options available for investment.

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ISSN: 1980-5861