For those who have been watching the markets for gold for the past year or so, it has been a very interesting time for assets. Metals like gold and silver have had a wild run, with gold topping some of the highest prices that it has ever hit. The price gold reached at its peak is not where it is at today, as it did drop somewhat throughout the middle of last year, but most analysts expect that gold will surge on and top the highest price that it has ever hit.
Why has the price gold is being sold at dropped, and then risen once again? There are a number of factors that would cause temporary drops in the price of gold, with quick rebounds. Here are some reasons why gold’s price has changed throughout this year and why analysts believe that the price will rise once again.
There was a temporary drop in the price of gold throughout the middle of this year and many people actually relate this to a common summertime slump. A large number of industries use gold for production, especially the fine jewelry industry and technology and healthcare sectors. During the summer, many people take vacations and business as usual slows down. There are also no big jewelry giving holidays during the summer, as traditionally the time between Thanksgiving and Valentine’s Day is when people give the ones that they love fine jewelry. A small drop off in the selling price of gold can be related to this natural hold on gifts and business in the summer months.
Gold is expected to reach new highs in the coming years, as an economic rebound has been slow to get off the ground. Many people want to protect themselves in case the economic recovery is not as strong as needed and purchasing gold is one way to do this. It is widely expected that the true recovery from this economic downturn will not fully occur for a number of years and anyone looking to protect themselves should consider investing in various precious metals.
As with investing in various stocks, assets also have some volatility. Just because gold dropped off slightly in price last year does not mean that this metal is not worth investing in.