GOLD AS A MEANS OF INVESTMENT
In general, people choose to invest in gold for long-term gain. This is due to the increase of the value of gold is not too big in the short term compared with investments in the stock market for example. But there are certain periods in which gold investment in the short term generate higher returns, even when compared with investments in the stock market and deposits or bonds.
Gold is indeed proven to be a good means not only to avoid inflation, but also a profitable investment vehicle. Here are some of the advantages of choosing gold as an investment vehicle:
Gold is indeed proven to be a good means not only to avoid inflation, but also a profitable investment vehicle. Here are some of the advantages of choosing gold as an investment vehicle:
1. No Counterparty Risk In Gold
When you hold gold, you hold Tangible Assets that do not depend on others. Tangible Assets at hand is becoming increasingly important as the financial crisis struck.
2. Consistency Purchasing Power
Let's say the price of gold fell from US $ 1,000 / oz to US $ 500 / oz, surely other commodity prices such as wheat, oil, etc also come down. Statistics showed a significant correlation between the price of gold to the price of commodities that humans need. So if the price of gold down, you also do not experience a decrease in your property, because you will still be able to buy goods as much as when the price of gold before the fall. So Gold called zero inflation.
3. Not Dependent On Government decree
Differences with a currency whose value depends on the decision of the government and bureaucrats each country, Gold values ??did not depend on them. By holding gold, you do not need to worry about your government's decision on interest rates and the like.
4. Assets that are outside the banking system
With gold you have the opportunity to have assets outside the influence of the banking system. We know that banks all over the world without exception, always haunted by the crisis from time to time. With Gold you will be free from the vortex of the banking crisis that could arise at anytime and anywhere.
5. Protection Asset Value
When inflation is high, the price of gold will rise higher. The higher the inflation, the higher the gold price increases. If the exchange rate of the dollar rose, gold prices also rose.
6. Most Effective Means Savings For Specific Purpose
Due to growing gold prices rise by inflation, then gold is safe to use as a means of saving money, the cost of the wedding, Advances and Child Education House.
7. Gold is easily available and highly liquid
Gold is easy to buy and resell anywhere. Gold prices are also relatively the same, you can buy gold anywhere and resold in another city with the same price.
ANALYSIS OF GOLD PRICE
Gold has a limited supply and not easily available, while demand for gold has never diminished, consequently the price of gold tends to increase from year to year. On a day-to-day reality, the price of gold does not only depend on the situation of supply and demand, or supply and deman. Gold prices are also affected by the overall economic situation. Here are some of the economic situation that often affect the price of gold:
1. Changes in exchange rate
The weakening of the US dollar exchange rate usually leading to higher world gold prices. This is because the investor chooses to sell the dollar belongs to them and then buy gold which is considered capable of protecting the value of their assets.
2. The world political situation
The world political situation also affects the price of gold, if the political situation is unstable world market players will shift investments from money market and stock market investments to gold, so gold demand jumped sharply.
3. Supply and demand
Examples which may affect supply and demand (supply and demand) of gold is like the incident in mid-1980 forward sales by mining companies always blamed for the increase in the price of gold. By doing a forward sales when gold prices rose, they can secure the mine output prices at a fairly attractive price. Another example, the case in mid-1998 in which the price of gold continued to decline. At that time, central banks in Europe said it would reduce its gold reserves in respect of the implementation plan of the euro currency.
4. The global economic situation
Approximately 80 percent of the total supply of gold used jewelery industry. Jewelry consumption is a major influence on the demand side. When the economy improves, demand for jewelery tends to rise. However, from statistical data visible jewelery demand is more sensitive to fluctuations in the price of gold compared to the increase of economic conditions.
The uncertain economic situation could lead to high inflation. Gold is used as a hedge against inflation. This benefit has been felt for a long time investor. With gold, investors got a perfect protection against the decline in purchasing power.
The uncertain economic situation could lead to high inflation. Gold is used as a hedge against inflation. This benefit has been felt for a long time investor. With gold, investors got a perfect protection against the decline in purchasing power.
5. Interest rates
When interest rates rise, there is a great effort to keep the money on deposit than gold that did not produce flowers (non-interest-bearing). This will cause pressure on the gold price. Conversely, when interest rates fall, the price of gold will tend to rise.
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