Two worlds can treasure gold for two reasons. Jewelry production is the largest source for yellow metal demand. Not all of them are precious. One side is India and Middle East. The gold store is the wealth store for women in these countries. Although we often think of retirement, the women who own gold see it as their pension. As you might expect, gold and silver price today is very high and is subject to major changes.
The First World is the other. Both North Americans as well as Europeans use gold to adorn their jewelry. This market includes wealthy customers, who are less sensitive to price swings than investment buyers. However, there is still a rational response to price swings. World Gold Council revealed that yellow metal demand rose 36% during the first half 2010 of 2010. Let’s take a look at the two worlds. Investment demand has risen by 118%.
In the past decade, gold has been the best-performing asset. Will it continue to rise in value? Thirty-years ago, the price of precious metal was US$850 an ounce. Today’s dollar should bring the price to US$2,358, which would be close to 1980’s nominal high. In September, it was at US$1,250. It could be said that the metal acts as a refuge during times of trouble. Inflation shows gold at its finest. There may be an opportunity in deflationary periods, especially if there are undervalued shares of companies that make gold.
It is known that there is an established leverage for a higher price of gold. It is not hard to see that it includes gold mining stocks. The key to this new gold rush are junior gold miners. Although the currencies of the world may be trash, gold is cash. Producers must replace their gold reserves in a competitive market. This is why juniors with safe yellow-metal ounces in their ground will be most sought after.