Volatility of Gold

  • 786 views
Uploaded on

The price of gold, as of every traded asset, is subject to the ups and downs of the market. The rate of this precious metal can fluctuate fundamentally. The volatility of gold must be a concern to all …

The price of gold, as of every traded asset, is subject to the ups and downs of the market. The rate of this precious metal can fluctuate fundamentally. The volatility of gold must be a concern to all short- and long-term investors ...

  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Be the first to comment
No Downloads

Views

Total Views
786
On Slideshare
0
From Embeds
0
Number of Embeds
0

Actions

Shares
Downloads
78
Comments
0
Likes
1

Embeds 0

No embeds

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
    No notes for slide

Transcript

  • 1. EXCLUSIVE
    Volatility
    of Gold
    www.goldratefortoday.org
  • 2. The price of gold, as of every traded asset, is subject to the ups and downs of the market
    The rate of this precious metal can fluctuate fundamentally
    The volatility of gold must be a concern to all short- and long-term investors
    VOLATILITY OF GOLD
    www.goldratefortoday.org
  • 3. Gold’s value is shaped by demand and supply
    The factors are gold production by gold mines, central banks, investors and the industry (jewelry, electronic etc.)
    VOLATILITY OF GOLD
    www.goldratefortoday.org
  • 4. Thinking that it is possible to exactly calculate and predict the gold price is plainly wrong
    There are many factors that influence the price, but cannot be predicted
    Such as the discovery of new gold deposits, and natural disasters that destroy gold mines
    VOLATILITY OF GOLD
    www.goldratefortoday.org
  • 5. Other factors that make the gold price unpredictable and volatile:
    The interplay of the international financial system
    Inflation and interest rates
    Alternative investments
    The irrationality of investors
    VOLATILITY OF GOLD
    www.goldratefortoday.org
  • 6. In average (especially since the beginning of 2000) the gold price has been risen
    This is because of the increased demand in emerging market (predictable),
    Central banks that stepped up their reserves gold reserves (partly predictably) and the financial crisis which made gold a more attractive investment (unpredicted by most)
    VOLATILITY OF GOLD
    www.goldratefortoday.org
  • 7. The 10-year upward trend of the gold price asks for caution
    First, gold is now at an all-time high
    Thus, investors who buy gold now do it when the price is as high as never before. Is this a wise move?
    VOLATILITY OF GOLD
    www.goldratefortoday.org
  • 8. Second, history tells us that the gold price can fall, and stay down for extended periods
    If someone had bought gold in 1979,
    that investor would have to wait for thirty years until the gold price had reached the same level, so that a sell would not result in a loss (not considering inflation and opportunity costs)
    VOLATILITY OF GOLD
    www.goldratefortoday.org
  • 9. Third, oil is in many respects similar to gold:
    both are popular commodities among traders, both are finite resources, extraction is costly and difficult to replace
    The recent history of the oil price should be a warning of the volatility risk of this commodity, and of all assets
    VOLATILITY OF GOLD
    www.goldratefortoday.org
  • 10. Oil stood in the beginning of 1999 at a low of US$ 19 per barrel
    In July 2008 oil was at US$ 147. Within one year the price fell to US$ 34
    This is an unprecedented drop of 77 per cent within just twelve month
    VOLATILITY OF GOLD
    www.goldratefortoday.org
  • 11. Could this also happen to gold?
    How to know when the gold price has reached its peak?
    VOLATILITY OF GOLD
    www.goldratefortoday.org
  • 12. The volatility of gold is a market risk
    Another market risk is the liquidity risk
    This occurs in thinly traded markets, where sellers have difficulties in finding buyers
    Futures of not actively traded contracts might run into this risk
    Shares of small stock mines might also face liquidity problems
    VOLATILITY OF GOLD
    www.goldratefortoday.org
  • 13. Visit my blog:
    www.goldratefortoday.org
    Live Gold Rates,
    Independent Trading Advise and
    many Resources about Gold Investing
    Interested in More?
    www.goldratefortoday.org