How does gold weather the storm of low prices?

A series of international events have created a vortex which got gold in the middle knocking down the price to a five-year minimum. What arguments do experts put forward to explain such drop? Is it exactly negative?

Read on!

Gold is viewed as a safe haven for investors in times of global instability, but the continual bad news about possible collapses of the markets already make investors yawn, besides their inclination to see the glass half full.

The improvement of international relations is fueling optimism in the world economy. Firstly, the signing of agreements has lowered the demand of safe haven assets, and since Greece signed an agreement with the IMF an imminent 'Grexit', which supported gold prices for quite a long time, is no longer a worry.

USA has also been involved in the easing of international tensions, starting with the normalization of diplomatic relations with Cuba, and the agreement with Iran regarding the removal of sanctions that have been impeding the international trade of the Middle Eastern country for years.

The reintroduction of Iran in the crude oil market in middle of a producers' war has lowered the price of oil that indicates inflation can be balanced for some time. The fact that hedges against inflation are not the order of the day is being a headwind for gold too.

While the movers and shakers of the gold market remain reluctant towards gold, gold prices will be low, though still being a safety net for those who base their investments on the premise that “forewarned is forearmed”.

According to gold market experts, if now the reduced risk of European financial crisis leads to an increase of interest rates and that turns U.S. dollar into the main asset, the factors which influence currencies negatively and would make them find shelter in the U.S. dollar bear the risk of seeing this currency fall in the same way.

The clients of the Global InterGold Online Gold Shop buy the highest quality and purity investment physical gold bars for they seek to guarantee the stability of their economic future.

Find more news and articles about the movements of the market of this precious metal in the official website:

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