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Are the Rising Prices Of Gold Trying To Tell Us Something?


Gold has been making headlines for the past two years. The price of gold has been climbing to the delight of a lot of goldbugs who have been waiting for so long to finally show the world how great this precious metal is. Those who analyse gold markets believe that gold prices are a precursor to what the future of the economy is likely to be. If gold is an indicator or a precursor of something, what then is it trying to tell the rest of us and are we getting the message? 

Gold has been regarded as a store of wealth, an asset that is necessary for diversifying risk. Gold has historically been a safe haven asset. This precious metal trades on supply and demand like any other commodity however, gold has an opposite correlation with paper assets. It is often seen to act negatively with strong economies. In times of economic weakness, falling stocks, weakening currency or any fear of financial crises like the great Asian financial crisis of 1997, the 2000 dotcom crash and recently, the global recession of 2008.

We might be holding our breath over the country’s economy, global trade tensions, American politics, Brexit and so much more but gold continues to march on to a high price. Right now, business for gold buyers Melbourne is good. It seems that people are genuinely interested in gold 

The price of gold is in U.S. dollars, this means that the value of the greenback affects the global gold price. When the U.S dollar falls, then people will find it cheaper to buy gold in for countries with different currencies. The major buyers of gold in the world are China and India, the relationship between those countries’ currencies and the dollar is important for demand. For the Chinese and the Indians, gold is more than a valuable investment but it is also part of the cultural fabric of the countries. China and India also happen to have the largest populations in the world which means that the demand will continue to grow especially if the weakening U.S dollar makes it cheaper to buy gold. 

Interest rates:

Three years ago, the gold market went into a bear market when a rumour of the U.S Federal Reserve contemplating an end or rather a review of its policy on quantitative easing. These rumours turned out to be an unfounded rumour. What it managed to do is suppress the gold price for three years. The Federal Reserve then decided to increase its interest rates in December 2018.

At the beginning of 2019, people were panicking about what the Chinese economy becoming slower and what that would do to the entire world market. America ad the U.K were also facing their own economic challenges. In response, the U.S Fed held back on its plans to increase rates. This launched gold even higher. This has been a boon for many people who own gold. There has never been a better time to be a gold bug than right now. The price of gold will keep going higher as long as the interest rates keep going down and the geopolitical and economic tensions persist.

So if you have gold that you have been storing for some time or have some gold bullion coins you inherited there has been no better time than now to sell to gold buyers Melbourne whilst the prices are still as good as they are. Markets can be volatile especially because they are driven by unstable factors, what could be true today may not be so in the years to come 

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