Gold has and always will be one of those commodities that attracts major investor interest. Seemingly no matter the condition of the gold price, there will be people out there who think they can make money off the back of the precious metal. Looking back at history, gold has clearly seen better days. Throughout the first decade of the 21st century it was clear that gold could do no wrong as the price skyrocketed. However, between 2010 and 2013 the gold price hit the breaks. During 2014 gold issued a rallying cry and showed signs of returning to its former glory, but is gold price revival over before it even really started?
Gold will always be one of the more temperamental precious metals. After years of rising gold prices, the gold price hit a brick wall in 2014. What was noticeable in the fall of the year was that the gold price was on the rise again, it seemed to mirror the rise of the US dollar and in many ways was piggybacking off its success. It all seemed rosy for the precious metal as it look set make a true return to form, but looking at gold in more detail it could be a case that the revival is over before it has even begun, at least that is what some analysts are saying.
Any issues surrounding the gold price can be connected to the euro. Due to the issues surrounding the currency they have issued a new initiative to print billions of new euros in order to stimulate growth. Many analysts will tell you that this spells bad news in general, but in reality it actually spells anything but. The move will only work to boost the performance of European markets, with gold set to actually benefit from this. History tells us that during periods of market stability people reach out for gold, as it is a safe asset that has the tendency to retain its value. As the euro grows and the loose monetary policies on other continents deepen, people will look to safer assets like to gold to stabilise their portfolio.
There is no denying that gold has been on a poor run between 2011 and 2013. It seems the bubble truly burst and gold specialist funds felt the brunt, but with every gold price crash there is a rise that follows. Peter Hambro of Petropavlovsk summed it up perfectly when he said, “gold has done exactly what you would it expect it to do [over the past five years] given its inverse relationship with world markets. When everything else performs well gold performs poorly, and when the reverse happens gold tends to do well. It is an insurance policy to look after your investments”.
Over time gold has been written off time and time again and sometimes aptly so, but in late 2014 it seems all the talk was premature. It piggybacked on the US dollar rise in order to get back to close to where it once was, while the new euro initiative should make sure that it stays there.
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Alexander Bowring is a London based writer and a Southampton Solent University Screenwriting graduate. He has worked alongside TV personality and Telegraph feature writer Alison Cork, whilst also having produced content for ITV, This Morning, Canvas8, Who’s Jack, Alison at Home, and Bonallack & Bishop Solicitors. Alexander also has a keen interest in investments.