Reasons For High Gold Prices in 2015
In 2012 and 2013 the price of a troy ounce of gold made a big plunge. For those who were willing to invest time in gold, it was of course good news, because after rain always comes sunshine. Here are a few reasons for high gold prices.
1. Asian gold rush
The Indian government discourages -with varying success its population to buy gold, but in China the gold hunger cannot be satisfied. This explodes the Chinese gold imports. In other countries, gold is not only given as a gift amongst the growing middle class population, but is also kept in the form of bullion to protect their new fortune.
2. Recession in the US
Many observers may indeed see an economic recovery, but that may not come soon. The US economy has been trying for five years to get back on, which only increases the chance of a new recession. Traditionally, gold is a safe refuge for investors.
3. Increasing inflation
Tensions in the Ukraine and the Middle East, terrorist attacks and natural disasters cause concern in the markets. Higher prices for energy and food mean that our money is worth less. Couple this with huge monetary interventions and inflation expectations, the demand for gold, whose price follows the inflation, will rise.
4. Volatile shares
Share prices are on the high side. Expect, therefore, sooner or later a correction, which creates uncertainty for shareholders. At such times, there is capital flows to the gold market, thereby scoring a slightly upward direction and provides stability in turbulent times.
5. Central banks buy gold
Even central banks appreciate gold. Western banks have stopped selling their gold reserves, while central bankers from emerging economies (China, Russia, Mexico, etc.) are buying the precious yellow metal in very large quantities.
6. Negative sentiment
Bank analysts and gold are really clashing. The fact that all kinds of investment professionals are talking about the “risky investment” in gold means that the bottom is near. And such negative sentiment means that soon there will be high gold prices.
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