Why the gold price is falling

[Fenrir]

Nothing to do with dollar or yuan.

Not true. According to Bloomberg, Gold is dropping (among other reasons) as more people invest in a stronger USD, a traditional safe-haven investment. At its core, yes this is a function of demand, as in the USD is in greater demand than is gold, but to say it doesn't have anything to do with the Dollar is missing half the story:

Safe-haven investments:

Is Gold Losing Out to Other Safe Haven Plays?

Contributors to Gold's price drops:

Why Is Gold Plunging?

It's also a bit of old-fashioned expectations, as seen in stock-markets when earnings don't match expectations, despite the earnings being strong - or the converse when earning greater than low expectations.

In this instance it was China and its less-than-expected build-up, and subsequent selloff of gold that has partially triggered a collapse in gold prices.

Gold stockpile less than expected:

China finally says how much gold it has, but nobody believes it

And a selloff:

Gold price 'flash crash' caused by five tonnes of Chinese bullion

 

[Daneshmand]

So the answer is: the US Dollar.

Does not matter. It is supply and demand. You can even denominate it in Japanese Yen: TOCOM : Quotes for Crude Oil

Not true. According to Bloomberg, Gold is dropping as more people invest in a stronger USD, a traditional safe-haven investment. At its core, yes this is a function of demand, as in the USD is in greater demand than is gold, but to say it doesn't have anything to do with the Dollar is missing half the story:

Is Gold Losing Out to Other Safe Haven Plays? - Bloomberg Business

Why Is Gold Plunging? - Bloomberg Business

That is just mumbo jumbo. Of course people who had stashed the gold will have to sell it, in order to invest in something else. And dollar is just a medium to transfer your wealth from gold to another form of investment. Few people keep their wealth in an absolute cash dollar form, since currencies unlike gold or other form of tangible investment have inherent inflation. Even a "strong" dollar has inflation. The function of dollar is not as an investment but as a wealth transfer medium. That is about it. Bloomberg is right only in narrow scope of commentary on momentary workings of market. But the fundamental reasons are what I wrote above.

 

[VCheng]

Does not matter. It is supply and demand. You can even denominate it in Japanese Yen: TOCOM : Quotes for Crude Oil

The price is always determined in USD and then converted.

 

[Daneshmand]

The price is always determined in USD and then converted.

Ok, dude. Go on believe on what you want. Obviously you want to believe in some conspiracy theory which either puts US dollar as a heavenly object or as a hellish object to justify whatever ideological inclinations you have. Clearly you do not understand how economy works or even what currency is.

 

[VCheng]

Ok, dude. Go on believe on what you want. Obviously you want to believe in some conspiracy theory which either puts US dollar as a heavenly object or as a hellish object to justify whatever ideological inclinations you have. Clearly you do not understand how economy works or even what currency is.

Clearly, my point that the USD is the word's reserve currency for good reason is well made.

 

[my2cents]

So the answer is: the US Dollar.

Yes, US Dollar is supreme for now. Right now to buy oil assets or precious metal assets is not advisable.

 

[VCheng]

Yes, US Dollar is supreme for now. Right now to buy oil assets or precious metal assets is not advisable.

Not bad for something that died many years ago, eh? Or not.

 

[SrNair]

it does not come down in our markets

Looking for ornament purchasing.

On topic : At end US also won that game .

HAHA........................Value of Mallu's Investments have come down...............

True right mate . Ten years ago gold rate was around 8000rs for 8 grams .My cousin's family gave around 2 kg gold ornaments for her at that time .But at current rate we cant get even 1 kg for that money .

 

[Faiez]

Ok, dude. Go on believe on what you want. Obviously you want to believe in some conspiracy theory which either puts US dollar as a heavenly object or as a hellish object to justify whatever ideological inclinations you have. Clearly you do not understand how economy works or even what currency is.

it's quite simple. The economic crisis hit and investors couldn't find anything that wasn't losing value, so they put their money in gold. And now since the past 2-3yrs, the economies are starting to recover and so to invest back in businesses, they're selling gold to buy USD (cuz you need USD to buy anything anywhere around the world).

As far as USD being a heavenly object, well to be honest it kind of is. With USD, you can buy anything. When you buy gold, you buy in USD or any other hard currency which increases gold demand, and when you sell gold, you obviously sell it for USD or another hard currency, which increases that currency's demand.

The function of dollar is not as an investment but as a wealth transfer medium.

there's a thing called speculative investment......people buy all sorts of stuff hoping they'll gain value after some time....

 

[Spring Onion]

Looking for ornament purchasing.

On topic : At end US also won that game .
.

well Yes seriously.

BTW whats dollar rate

 

[SrNair]

well Yes seriously.

BTW whats dollar rate

Dont know .
Perhaps @levina can help you .

 

[Faiez]

Supply side depends on energy. Gold is an energy concentrate since for its recovery from mines or from associated minerals, energy has to be spent. In this, gold depends on oil market. The oil goes down, the gold becomes cheaper to produce.

even if it becomes cheaper, unless they start mining significantly more gold, prices should remain pretty much intact (not falling the way they are). And even if they do produce a lot more which is not exactly the case(the gold production has gone up, but the total gold produced relative to total gold stock is quite low) , the increase in supply is not enough to lower gold prices the way they have gone down. It's simply a case of people selling gold for better investments. So it's a demand side thing. The supply of gold is usually quite constant.

 

[Levina]

Dont know .
Perhaps @levina can help you .

One dollar is about Rs63 today.

I do not invest much in gold, it's dead money + Unlike other mallus I don't like it much. I stopped investing in diamonds when realised it gives me 30% loss. Buying properties is a better option in India. Lol

 

[rockstarIN]

it did here,,,,it was Rs 32000,,,now 24000.
so better to wait till year end?

It will go down for coming g two three years for sure. If you look as an investment. .go for shares else wait for 1+ years

 

[SrNair]

One dollar is about Rs63 today.

I do not invest much in gold, it's dead money + Unlike other mallus I don't like it much. I stopped investing in diamonds when realised it gives me 30% loss. Buying properties is a better option in India. Lol

Land properties are also not that safe now a days ,at least in kerala.
High value of the land is now become a curse. So business are in a dull.
But I dont know about other states.