Thursday, October 23, 2008

If you are wondering why gold is going down in price

Financial crisis: hard-up consumers are selling jewellery for cash

People are selling their gold jewellery because the price of gold is so high, and they have no money. Not in the Krugerand coin form preferred by speculators, but still shows why gold is going down in price, not up.

Posted by jonb @ 01:40 PM (1005 views)
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10 thoughts on “If you are wondering why gold is going down in price

  • Interesting reading, but an 11% increase here will hardly budge Gold’s spot price (an 11% increase on a tiny, tiny fraction of the total transactions in Gold).

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  • sold 2 rent 1 says:

    Gold is going down because of fear of deflation.

    But the world is about to go into an IR slashing cycle that will print more money than most can even imagine.
    Know your *rillions? What comes after quadrillion?

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  • What comes after quadrillion?

    1,000,000,000,000,000,000,000,000 + 1

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  • When Bush was told that 3 Brazilian soldiers had been killed in action – it is said that he asked how big a number a “brazillion” was..

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  • S2r1 : quintillion = 10^15

    A quintillion here and a quitillion there and sooner or later you’re talking about real money.

    (tri-, quad-, quint-, sex-, sept-, oct-, non-, dec, …)

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  • The selling is one part of the story. If people are selling, they certainly aren’t buying, and that’s where the rest of the downside price pressure comes from.

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  • I think gold is still a safer bet long term, the financial termoil and interest rates rising through currency protection make it a firm bet.

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  • I disagree entirely, I think the USD has gathered in strength because energies and commodities are selling off because those in the know don’t want to be holding $ related assets. Then there will be a shift out of dollars into Yen as the dollar collapses when the US Gov. default in January 09.

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  • mountain goat says:

    jonb – “they certainly aren’t buying”

    Have you tried buying gold coins from a dealer lately? Sold out.

    I don’t understand why the supply/demand principle seems to have broken down in the gold market so badly.

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  • I know gold coins are in high demand, but other things containing gold are not, and the jewelery market is generally much bigger than the gold coin market.

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