OBAID UL HAQ

“Gold prices of last ten years and its impact on

economics”
 GOLD AND ITS IMPACT ON THE ECONOMY

1. Gold's impact on the economy waxes and wanes, depending on how safe other investments are.
2. Gold was first used for money in 643 BC. In 30 BC, the Roman Emperor Augustus set the price of gold at
45 coins to the pound.
3. When the price of gold shoots up, everyone wonders if they should buy it.

4. People invest in gold for one of three reasons.

• Offset stock market declines
• Hedge against inflation
• Counteract a declining dollar
• How Gold Affects the Economy and You:-
Gold's impact on the economy waxes and wanes, depending
on how safe other investments are. When other investments seem too risky, gold always looks like a good
hedge. In fact, you can tell how healthy the economy is from the price of gold. When the U.S was on the
gold standard, the precious metal had an even greater importance.

• Gold Price History:-

Before gold was used as coinage, its value was recognized. Gold jewelry is buried
in the Tomb of Djer, king of the First Egyptian Dynasty. Gold's beauty, luster, and malleability made it
perfect for many uses. In fact, the Egyptians became masters in the art of beating gold into leaf.

• Gold, "The Ultimate Bubble," Has Burst:-

Was commodities trader George Soros right when he said:
"Gold is the ultimate bubble"? Soros argued that gold, unlike housing, company stocks, or even oil, more
easily lent itself to speculation because it has very little intrinsic value. That could mean the high prices in
2011 and 2020 were a sign of an asset bubble.
• PRICE TRIPLLED IN 1 DAY:-
One of the most important moments in gold price history was the
day President Richard M. Nixon detached the U.S. dollar from the gold standard. Gold prices skyrocketed
from $42 to $120 an ounce.

• $100 in Six Hours(02-062016):-

In June 2016, gold prices surged $100 an ounce in six hours.
Investors panicked in the wake of Brexit, when Great Britain voted to leave the European Union. Prices rose
from $1,254.96 at 4 p.m. on June 23, the evening of the Brexit vote, to $1,347.12 at midnight. Investors
bought gold as a hedge against a declining euro and British pound.

• ABOUT 2020 GOLD PRICE:-

On July 23, 2020, gold surpassed its prior high, closing at $1,882.35
an ounce.2 Investors were concerned about the 2020 recession that had been caused by the COVID-19
pandemic. By August 7, 2020, gold reached a new all-time record of $2,062,50 an ounce.
• ECONOMY:-

Gold mining is a major economic driver for many countries across the world.
Well-managed, transparent and accountable resource extraction can be a
major contributor to economic growth due to the creation of employment and
business opportunities for local people. As well as direct and indirect jobs
and employment, gold mining also brings foreign direct investment, foreign
exchange and tax revenues to countries.
LAST TEN YEAR GOLD DATA:-
CONCLUSION:-

By analyzing the reasons behind gold’s surge; p resenting the relevant fundamental stories, p
rejections, and catalysts; studying the p rice action, supply and demand factors, and technical
levels; and pointing out the extreme and very unsettling psychological forces currently involved
in the gold theme, we have explained why gold and related stocks and commodities are showing
patterns of a bubble and should be avoided. With global crises, currency devaluations, stagnant
recoveries, and a looming threat of war, many funds and investors have flocked to gold as a
diversification tool, protection from inflation, and even investment. And with prices up over 600
percent in less than 10 years, many still see more upside for this historic store of value. But with
the most prominent banks, research firms, gold mining companies’ CEOs, and investment
legends predicting gold prices to reach anywhere from $1,000 to $15,000, who do we listen to?
And can we really be sure these aren’t extremely optimistic forecasts that will never be realized?
It is true that many of the most well-known individuals strongly believe in the continuation of the enormous
gold bull market. It is also true that gold has been of tremendous interest to investors and speculators
worldwide due to its importance as a fear hedge, as a store of value, as protection against currency devaluation,
and as tangible wealth. But after an historically steep 11-year rise and domination of news and media headlines
and investor attention for at least a few years, are most of the fundamental reasons to invest in gold already
factored into the price?
Many clues pointing to a bubble have been hard to notice or accept because gold supporters have had so many
counterarguments as to why gold is a good investment. The failing dollar, economic upheaval, volatile and
falling stock markets, and unstable political leadership have convinced many investors and institutions to trust
in gold as the only “safe” investment. However, the need to find a “stable” asset or investment has made gold a
highly speculative and now unstable commodity. Gold has historically been a store of value and a very
important tangible asset, but the rush to invest in gold has pushed prices way beyond reasonable levels and
have turned it into an emotional trade based on fear and greed. The reasons to buy gold seem to make sense,
and have justified the buying of gold for a few years. But the fundamental reasons don’t work anymore
because gold has turned Conclusion 233 BCON 03/10/2012 12:11:9 Page 234 into an object of mass
speculation; the reasons to buy gold have already been priced in. The continued run-up now relies on more
investors buying gold, rather than fundamental catalysts that justify higher prices. Bubbles have a great way of
appearing to be safe and profitable, but ultimately collapse on investors unexpectedly.
THE END