with the economy in such a state, many more people have been buying gold to protect their investments. this causes a raise in the price. it is supply and demand. this is why anything gets more expensive or less expensive.
The price of gold is one of the few commodities whose price is NOT really based on supply and demand. Nor is its price based on its utility. If gold were priced based on its use in dental amalgams, electronics, and even jewelry, it would be far cheaper than it is. Gold’s price is artificial based on things like investment security, inflation worries, relative currencly values, and economic concerns, as the other answer suggests, but actual supply and demand for physical gold have little bearing on such trades. Only a few gold investors actually ever take delivery of physical gold.
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