Gold, like all precious metals, may be used as a hedge against inflation, deflation or currency devaluation. As Joe Foster, portfolio manager of the New York-based Van Eck International Gold Fund, explained in September 2010:
The currencies of all the major countries, including ours, are under severe pressure because of massive government deficits. The more money that is pumped into these economies – the printing of money basically – then the less valuable the currencies ...become.
The currencies of all the major countries, including ours, are under severe pressure because of massive government deficits. The more money that is pumped into these economies – the printing of money basically – then the less valuable the currencies ...become.
If the returns on bonds, equities and real estate do not adequately compensate for risk and inflation, then the demand for gold, and other alternative investments (such as commodities) increases. An example of this is the period of stagflation that occurred during the 1970s, which led to an economic bubble forming around investment in precious metals. However, after a period of financial stress, such as the Great Recession, eases conventional investments become more attractive, and gold values may fall.
Jewelry and industrial demand
Jewelry consistently accounts for over two-thirds of annual gold demand. India is the largest consumer in volume terms, accounting for 27% of demand in 2009, followed by China and the USA.
Industrial, dental and medical uses account for around 12% of gold demand. Gold has high thermal and electrical conductivity properties, along with a high resistance to corrosion and bacterial colonization. Jewelry and industrial demand has fluctuated over the past few years due to the steady expansion in emerging markets of middle classes aspiring to Western lifestyles, offset by the financial crisis of 2007–2010.
Gold jewelry recycling
In recent years the amount of second-hand jewelry being recycled has become a multi-billion dollar industry. Some companies have been offering good prices and fair services for their customers. However there are many companies that have been caught taking advantage of their customers, paying a fraction of what the gold or silver is really worth, leading to distrust in many companies.
Jewelry and industrial demand
Jewelry consistently accounts for over two-thirds of annual gold demand. India is the largest consumer in volume terms, accounting for 27% of demand in 2009, followed by China and the USA.
Industrial, dental and medical uses account for around 12% of gold demand. Gold has high thermal and electrical conductivity properties, along with a high resistance to corrosion and bacterial colonization. Jewelry and industrial demand has fluctuated over the past few years due to the steady expansion in emerging markets of middle classes aspiring to Western lifestyles, offset by the financial crisis of 2007–2010.
Gold jewelry recycling
In recent years the amount of second-hand jewelry being recycled has become a multi-billion dollar industry. Some companies have been offering good prices and fair services for their customers. However there are many companies that have been caught taking advantage of their customers, paying a fraction of what the gold or silver is really worth, leading to distrust in many companies.
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