April
8, 2014: Gold is a secure bet against inflation?
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Gold is really a tool to hedge against inflation or pure speculation?
Look at the 5-year price chart of gold; it was once traded above $1900
USD/ounce around October 2011. Currently it is traded at $1309 USD/ounce in
April 8, 2014. That means whoever bought gold in October 2011, lost their money
invested in gold.
USD is going up, not gold price. Gold definitely is not a tool against
inflation. I guess, it was a pure speculation by traders when recession or
temporary issues kicked in. They bought gold first, and then speculated gold
prices to get others jumped in. Of course they got out before others, who got
trapped with loss of falling gold price.
Gold is only good for jewelry and a few critical applications that used gold as
conductor materials.
Btw, how could one say an ounce of gold is worth $1300 USD? By pure speculation
or by supply/demand principles? I think, supply and demand is the only real
driver to determine gold prices - neither against inflation nor safe heaven.
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