The fact that there will be a drop in the price of gold, experts warned in advance. For a long time, starting from the last years of the 20th century and up to 2007, the price of the precious metal has been steadily increasing. This was directly related to the growth of the economy as a whole and favorable conditions on the world market. Investment volumes grew, the industrial and construction sectors developed. Prices for natural resources, including the price of gold, had a clear positive vector. Slowing price increases for this precious metal was the first symptom of an impending crisis.
Although many participants in the global market did not notice this.
After the financial crisis broke out, the insignificant fall in the price of gold stopped and its sharp increase followed. In this context, it should be noted that the precious metal is a currency, raw material and an object of investment. Such a complex property makes it a special subject, the attitude to which is different. When the financial crisis of 2008 began, many shareholders hastened to get rid of them and purchase gold from the proceeds. Such a landslide demand for this resource, naturally, generated an avalanche-like price increase. But the fact of owning a gold bar does not yet generate income. It is a form of preservation of life values.
And
life values are quite familiar and necessary objects in everyday life. To go by car, you need to refuel it. At the gas station, you can pay only with money, a "piece" of gold as a payment here simply will not be accepted. For this simple reason, you again have to bring metal to the market. As a result of this, there is another drop in the price of gold. Like all processes in nature and the economy, the price of any resources varies widely. Experts do not tire of talking about this, however, a trend change always occurs unexpectedly.
China's booming economy requires various resources. Oil, timber, ferrous and non-ferrous metals are supplied here from different regions of the globe. Precious metals are no exception. Gold prices, like any other product, add up based on market conditions. As you know, the
electronics industry is one of the largest consumers of precious metal. In order for electronic devices - computers, phones, tablets - to be available to a wide range of consumers, they must have an adequate price. And this means that you need to acquire the necessary resource at the lowest price.
In other words, the fall in the price of gold is fully approved by the manufacturers of electronic equipment. It is likely that this process will lead to lower prices for computers. To this we must add that the jewelry industry is a traditional consumer of precious metals. Jewelry manufacturing at all times required high quality raw material. Precious jewelry is in demand in any economic situation. Thus, we can assume that the current decline in the price of gold is a temporary phenomenon. In the near future, there will come a moment when this process flows in the opposite direction.