Business
Why Gold Is Popular Amongst Investors
Traditionally gold has been an important part of international economies.
It is no longer a principal currency, but it remains a real long term investment.
This is principally the case in a bear economy (a drop in prices for a few months in an asset).
A Surge in Gold Demand
The demand for gold had increased by 21% in the first quarter of 2016.
This is the quickest jump on record.
The rise came despite a fall in the demand for jewelry and electronics which declined by 3%.
Inflation is considered a keystone for gold’s attractiveness. Inflation remains constant in the developed world.
However, global uncertainty caused investor’s push for gold.
The price of gold has increased more than 20% this year, which was the fiercest price performance in almost three decades.
As gold prices swell, one of Wall’s Street’s major banks is flocking to gold.
The expectation is that it will reach $1400 this year.
This makes it a very viable commodity and also it has a low storage fee.
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The World Gold Council – Factors Affecting Gold Popularity
- Negative Interest Rates set by central banks in Japan and Europe makes gold a substitute currency.
- The prediction that the Federal Bank was considering negative rates.
- The Chinese currency deflation.
- The probability that the course of interest rate increases in the US will be slower than originally anticipated.
- A slowdown in US dollar escalation.
- Reduced forecasts for global growth.
Is Gold a Safe Investment in Current Precarious Times?
On May 12, 2016, gold fell in value.
This was in direct contrast to the 15th month high it experienced the week before.
A strengthening dollar encouraged some buyers to cash in shares.
The value needs to revert to a level of $,1300 for the market to move from a technical outlook.
At present, the US dollar is very robust compared to other exchanges such as the Euro or Yen.
As the dollar has consolidated, the price of gold has fallen.
If the dollar changes direction or crumbles, more investors will revert to gold, increasing demand and the price.
Ways of Investing in Gold
- Traditionally investors have bought gold bullion bars.
- Gold coins are a popular way of investing in gold.
- Gold Exchange traded products – these carry risks and incur expenses.
- Gold certificates – banks replace gold with certificates.
- Shares in gold mining companies.
Barrick Gold Corporation – A Lucrative Investment Opportunity
The majority of Barrick Gold Corporation’s maneuvers are based in America – 50% in North America and 43% in South America.
It has the five largest mines which produce 60% of the global gold production. It produced over 6.25 billion ounces in 2014.
Barrick Gold Corporation is the world’s largest and most successful gold establishment.
However, increasing debt threatened to derail the company.
In 2016, the corporation has been working to reduce its debt to make the company a viable choice for investors.
The company is committed to only establishing spending plans that will add value for shareholders.
It plans to highlight capital self – control and lower costs at mines which are already one of the lowest costs in the business.
It aims to lower debt by another $2 million in 2016.
These cost cutting measures are working for investors as stock has increased by 114% so far this year.
Conclusion
The cost of gold usually remains quite stable over extended periods.
However, it can vary in price.
The price of gold is high at present, but it is gradually starting to decline.
But, history has demonstrated that the price of gold will thrive.
