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Wolfie00
My dog is an elitist
Premium
join:2005-03-12
kudos:8
reply to Gone

Re: Buying some USA nickles for the intrinsic value.

said by Gone:

The value of gold is a direct indicator of economic stability. When the economy sucks, gold value goes up. When the economy is booming and there's plenty of credit and money to go around, the value of gold plummets. The value of gold now, and the lead-up to it, were direct results of both the economic mess the entire world is in now, and the fact that most people started to realize the jig was up in 2006-2007.

I'm no expert, but I would suggest that there are two basic components to gold prices: the fundamentals that determine long-term value, and the speculative market forces that determine relatively short-term value (which can be many years) that are driven by things like gold as a "safe" haven from inflation and financial instability. I was talking about the long term fundamentals, which are driven by things like population growth and increased demand for scarcer resources.
--
"Everyone is entitled to their own opinion, but not their own facts."
Daniel Patrick Moynihan


Gone
Premium
join:2011-01-24
Fort Erie, ON
kudos:4

Fair point, but the increase in gold prices since about 2006 or so would be part of that short-term speculative purchasing that you mentioned. I would suspect that the long-term value, at least to relative to fiat money, would have more to do with inflation than the actual scarcity or supply and demand.