Five Fundamental Reasons Gold Will Soar
Does the price of gold look attractive to you? If that is the case, then you are not unaccompanied. Let us face it; of all the minerals mined in the world today, none is so usefully and in demand like gold. There is no doubt that the price of gold will continue to strengthen. This is evident from the fact that the brass tacks for higher gold prices have not been this good in over a generation. Here are five reasons gold is set to soar higher.
Physical gold may become hard to get
If you have been very keen, you must have noticed that the gap between supply and demand is not letting up. This is because the production of gold has remained stagnant since 2001. Since that time, the demand has increased a hundred fold while the price has only increased six fold. If this trend continues as it is today, chances are that the market is going to witness a complete lack of available supply, which will definitely lead to skyrocketing of the gold price.
Gold demand in industrial use
While gold is synonymous for its value, is also a much sought after metal in many industries. There is a growing industrial demand for gold, especially in industries such as energy, healthcare and technology. This is because its usefulness is linked to its diverse use such as conductivity, malleability, does not tarnish, and can be used to create alloys with other metals among other useful properties. All these properties have seen the demand of gold in different industries across the world
The presence of a lot of cash that has not entered the gold market
Fundamentally, just like money, gold is also a medium of exchange that enables trade in goods and services. On the other hand, it is also good to note that most foreign reserves are pegged to gold. In other words, it is correct to say that gold is a substitute for money. The purchasing power of money is based on demand and supply of money. When all these factors are considered objectively, one will realize that there is much more upside movement in gold prices than downside.
There is a leak in the world economy
If you have a good knowledge on money matters, you will agree that there is a non-stop dilution of currency, which is happening in a scary trajectory level. While world currencies are losing their purchasing power, gold is gaining in purchasing power. The gross devaluation of world currencies can be linked to the economic hardship, which is only going to get bigger and show no sign of reversing course. This can only be temporarily dealt with by serious dilution of the currency in the name of more money printing or “quantitative easing”. The unsustainable fiscal and monetary actions of governments all around the world, will definitely force the price of gold higher and higher.
Gold stocks are entirely under-owned
It is evident that the average mainstream investor owns very little gold. This means that there is a large lack of gold and gold stock ownership among the common men in the world. Therefore, the possession of gold is with the very few rich men who control the demand and sully of gold.