Why Is Gold Worth So Much Right Now? - 4.0 out of
The price of gold is again on the rise, and there seems to be no limit to where it may end up. Unless you have been living on another planet (or just don’t watch TV), you’ve likely heard thousands of television commercials in the past couple of years, telling you that today is the best time to sell gold. Perhaps you have been scratching your head, wondering what’s behind this rise in the gold price. This article will attempt to shed some light on the gold phenomenon.
Bad News is Good News, For Gold Anyway
When it comes to gold prices, bad news is typically good news. The current economic situation not just in the U.S., but around the world, has led to a new increase in the price of gold, which (at the time of this writing) was $1380 per ounce While the gold market has seen spikes in the past, the driving force behind the latest elevation in the price of gold was created by:
- Anxiety by investors: When the United States’ previously untarnished AAA credit rating was downgraded in the fall of 2011 by Standard and Poor to AA+, investor’s fears about a weakening U.S. economy became even deeper. While the ramifications of the downgrade are unclear, investors see gold as a safer bet for their money.
- A feeble economy in the U.S. and around the world. In the U.S., the economy is still in the throes of rehabilitation. But the economy isn’t just bad on the home front. Europe is experiencing a debt crisis that is threatening to destabilize financial markets around the world. With concerns that two of the planet’s major economies, Italy and Spain, might get priced out of the bond market and then default on their debts, gold looks like a safe bet to lots of folks who are unsure where to turn. With the worry hanging in the air that European countries may default on their debt, the euro is under close watch by investors. But without a gold standard in place, the value of gold is not tied to the balance sheet of any country, which makes it appealing to masses of worried investors.
- Falling appeal of the U.S. dollar. At one time, the world looked to the U.S. dollar as the biggest reserve currency and a traditional safe bet for conservative investors. But that appeal has ebbed. A lot. The allure of the dollar has fallen due to concerns about the United States perceived inability to trim its debt and the measures that the U.S. Federal Reserve has taken to support the flailing U.S. economy.; Basically, gold has been transformed into a hot currency. With both the U.S. dollar and the euro weighed down by concern over debt, one can see why gold would garner more confidence among investors who are focusing on acquiring an asset that will preserve their purchasing power.
In sum, uncertainties have made the price of gold ascend higher and higher. Debt crisis in Europe. Economic struggles in Japan. Political upheaval in Egypt. Threats to the global oil supply. With all of the political problems around the world occurring at once, investors have grown weary and want to invest in something that is tangible and safe.
What’s that mean for you?
For the Average Joe on the street, what does all this mean? Well if you don’t plan on investing in gold, then you can still “rack up” by cleaning out your jewelry box. What it really boils down to is that right now is an ideal time to sell scrap gold, dental gold, or other gold that you might have that you no longer want or use Broken rings, necklaces, bracelets, anklets, earrings, and cuff links – you name it – if it is scrap gold and you no longer want it, there has never been a better time to cash it in. With the price of goldat a record high, gold buyers are paying a record amount for scrap gold. Hold on to it, and you may get less this time next year, or even next month.