Research and review exercise
Article: “GOLD NOW IS NOT THE RIGHT TIME TO BUY” BY: UMA SHASHINKANT
According to journalist, Uma Shashinkant, “Gold now is not the right time to buy”. In his article “Gold: now is not the right time to buy”, Shashinkant explains that according to his “sources”, there has been a sharp and unexpected appreciation in the price of assets attacks on the amount of attention paid by investor’s and how gold being the centre of such an attention. In this article, we find a great example of market supply and demand elaborating on how the price of gold is rising due to fewer resources on the market of the yellow metal.
He explains in this article that Gold has been predicted for some time in Europe and global currency is going to be kept high. He says this is due to Investors seeing gold as “safe haven”, despite of all warnings. The risks in the global financial and currency markets, especially since 2006 having it increased in the clamour for the yellow metal. Due to gold being sought after when other assets turn out to be risky, its usefulness in the wealth portfolio rises as overall risks increase. According to him when the international event was held gold had moved up and has been increasing and has also increased the clamour for the yellow metal.
In this article Uma argues about how Gold investors who increase their allocation to gold during this period are now looking at decent gains in a market affording negative returns. This, by gold being the primary activity of central banks of countries. Centre banks have the option of holding reserves as currency U.S Dollar, primarily or as gold. Central banks due to them consistently buying gold in the light of risks in the United States of America and global economies, they sell currency and buy gold instead. The real reason for the rise in price of gold is because of the strategic component in the portfolio of international institutional investors which are such as pension funds, hedge funds and insurance companies where investors choose