Gold and Golden Times
The Yellow Metal Gold has caught the imagination of mankind since time immemorial. Used as direct token of money in the ancient times, gold gave up that status to allow for monetary expansion over time but even today gold reserves have a direct bearing on money supply in an economy. Being an excellent medium for store of value, gold is in demand from Central Banks besides from consumers.
The producers of gold being limited to Australia, Russia,South Africa the yellow metal is constantly in short supply as the total output from mining remains below 2300 tonnes whereas recycled gold supplies contribute to less than 1400 tonnes per annum.The demand from India and China being in the vicinity of 1000 tonnes each per annum the pressure on prices of gold are real.
When commodity trading started in an organised manner, naturally gold also started being traded in a big way. This brought an element of speculation pushed by traders' hoarding of the precious metal. Thus the prices of gold have been steadily going higher before touching an all time high of $ 1900 per ounce in September 2011. The prices have since eased by about 15% but this price movement in gold must be seen as a result of profit booking exercise by speculators and the regular short term trade cycle rather than any reservations about gold as a safe store of value.
Gold must be part of one's investment portfolio.The long term outlook for gold prices will remain stable to bullish. Thus buy and accumulate on dips is the perfect strategy on gold trading, though the short term traders may go by trend analysis forecasting like GoldForecaster.
Dubai Gold Exchange
