Who bought jewelry in the last eight years knows: the price has gone up a lot. The main cause is the price of gold, which had risen to $ 1,900 in September 2011. Then began the descent and now the price of gold has fallen 40% from their highs, to 1,000 dollars. I am now days that the yellow metal continues to fall: last time was in the 1996. The result is that the jewelry (in few months) will cost less, but also that if you want to sell now your earrings, rings and necklaces you don’t will gain the same figure a year ago.
It is a momentary descent? Difficult. There are three economic factors that drove gold down.
1. Strong Dollar A strong US currency harms the price of raw materials, which are measured in dollars, as it makes them more expensive for buyers. Gold should also be a hedge against inflation and currency devaluation.
2. China, Iran and Greece. Gold prices plummeted to $ 40 an ounce in a few minutes after the Chinese central bank said that accumulates reserves of gold at a slower pace than previously thought. Another reason: the US-Iran agreement eases the tensions in the Middle East and makes less unstable area. And the agreement between the EU and Greece has defused tensions in Europe.
3. Inflation. It is not part of concerns in the US, despite extremely low interest rates and years of massive bond purchases. The collapse of raw materials lowers inflation and inflation expectations. All of this pushes down the price of gold.
The gold will go down again? According to the investment bank Goldman Sachs pricing could fall below $ 1,000 an ounce for the first time since 2009. But not everyone agrees. We’ll see… Federico Graglia
