Gold prices

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Gold prices
Gold is currently trading at over $1,500 per ounce. The price of this precious metal has increased over the years by about 600 percent. Despite the currently experienced inflationary rates, the trend in the price of gold is unlikely to be reversed considering that it is more regarded as a store of value and not a unit if account. According to the world gold council, the demand for gold in the first quarter of the year 2011 totaled to about 981.3 tones.
There seem to be a positive relationship between gold price level and the US dollar price level and the relationship is that of long-term. Gold tends to gain during the periods of uncertainty. During moments of uncertainties, investors who largely are risk averse prefer to hold their wealth in form of the less risk assets.
Just like any other valuable assets, gold prices are also a function of demand and supply. The supply for this precious commodity is relatively stable.
On Friday 12April 2013, the prices for gold went down by more than 5 percent. This has pushed the gold market to about 23 percent from about $US1, 920 an ounce the market had reached in September 2011. Institutional investors are shifting from the gold holdings to other assets. Some analysts believe that the trend in gold prices s due to the increasing uncertainty over the fiscal cliff. Gold`s safe haven properties are expected to reassert after fear of high taxes abates and worries about global instability increases. By the end of last year, gold prices had increased relative to the annual trend. The first months of 2013 saw a decreasing trend CITATION tru13 \l 1033 (Gold).
On 15 April 2013, gold traded at $1,395 an ounce, which was a decline of about 9.2 percent in the last two years. The fall in the gold price could have been contributed by the expectation that the Federal Reserve would tighten the monetary policies by a stop on the quantitative program. This per se means that th...