Metals (ex : GOLD) - What Makes Gold Price to Rise Up Always in Commodities - Its a universal fact that Gold has risen more consistently over the last 40 years than anything else.
Below are ...
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11-16-2012 12:44 PM
What Makes Gold Price to Rise Up Always
Its a universal fact that Gold has risen more consistently over the last 40 years than anything else.
Below are some of the major reasons for Gold price rise, apart from the usual supply demand tug of war. A lot of people may say Gold price will bubble out one day, just like stock markets which is not the case.
- Mining Cost of Gold is always on the rise
It has been claimed that most of the Earth's gold lies at its core, the metal's high density having made it sink. As the mining goes deeper and deeper, the mining cost goes up. Global Economy grows, Inflation goes up, Labor costs go up almost every year. When the mining cost goes up, it will eventually push Gold prices higher. - The world consumption of new gold produced is about 50% in jewelry, 40% in investments
The demand for Gold for jewelry and from an Investment perspective is never going to dip. Gold is the safest investment even for a layman and with ever rising population, the demand for Gold will also never rise. - Supply of Gold is not going to rise out of the blue
No one's going to find Gold mine surfacing along river beds increasing the supply of Gold across the world.
Yes, Gold can still fall 30% at times, but it will only eventually go up even more strongly over the years. If you want more proof, look at the below chart for Gold Price in INR since 1973.
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