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Why Gold is becoming more and more expensive?
Which are the gold producing countries. Since gold is used only for ornaments and IMF has banned backing of currencies by gold, why the prices of gold are rising as compared with other metals? Does gold still has bearing on economy? If yes in what way?
2 Answers
- Anonymous8 years ago
There are many reasons:
1. gold is commodity it is subject to speculation in the future market.
2. gold is central bank reserves around the world. The central banks can swap from US$,Euro,Yen to gold and vice versa. They can also buy and sell gold to make profits.
3. some countries love gold because it shines bright such as India,China etc.
4. price of gold has been increased between 2008-2013, because the US dollar has been depreciated. But the price went down for moths recently because the FED wanted to stop QE. However,when it decided to do nothing, the price of gold increases.
5. gold has high marginal utility,but very low total utility. It is still true until today. Even the cell phone has changed to use rare earth metal instead of gold.
