Gold an Investment Buy Gold

Off all the precious metals gold is the most popular as an investment. Investors generally Buy Gold as a hedge or harbor against economic, political, or social fiat currency crises.
The Gold Market is subject to speculation as are other markets, especially through the use of futures contracts and derivatives. The history of the gold standard, the role of gold reserves in central banking, gold low correlation with other commodity prices, and its pricing in relation to fiat currencies during the 2007-2012 global financial crisis, suggest that gold behaves more like a currency than a commodity.

Gold Price:.

Gold has been used throughout history as money and has been a relative standard for currency equivalents specific to economic regions or countries, until recent time. Many European countries implemented Gold Standards in the latter part of the 19th century until these were temporarily suspended in the financial carises involving World War I. After World War II, the Bretton Woods system pegged the United states dollar to gold at rate of US$35 per troy ounce.The system existed Until the 1971 Nixon Shock, when the US unilaterally suspended the direct convertibility of the United State dollar to gold and made the transition to a fiat currency system. The last currency to be divorced from gold was the Swiss France in 2000.
Since 1919 the most common benchmark for the price of Gold has been the London Gold Fixing, a twice-daily telephone meeting of representatives from five bullion-trading firms of the London bullion market. Furthermore, gold is traded continuously throughout the world based on the intra-day spot price, derived from over the counter gold trading markets around the world.

Factors influencing The Gold Price:.

Today, like most commodities the price of gold is driving by supply and demand as well as speculation. However unlike most other commodities saving and disposal plays a larger role in affecting its price than its consumption. Most of the gold ever Mined still exists in accessible form, such as bullion and mass-produced jewelry, with little value over its fine weight and is thus potentially able to come back onto the gold market for the right and is thus potentially able to come back onto the gold market for the right price. At the end of 2006, it was estimated that all the gold ever mined totaled 158,000 tonnes. This can be represented by a cube with an edge length of 20.2 meters.
Given the huge quantity of gold stored above ground compared to the annual production, the price of gold is mainly affected by changes in sentiment, rather than changes in annual production.According to the World Gold Council annual mine production of gold over the last few years has been close to 2,500 tonned. About 2,000 tones goes into jewelry or industrial production and around 500 tonnes goes to retail investors and exchange traded gold funds.