Why Gold Now Very Over-Valued & Over-Rated
In general, gold investors can be categorized into two groups. The first group away from the gold because the price is too expensive. They will usually be disappointed with the high gold price. The second group was quite obsessed with the gold price reached a high gold price still eager to buy or to be reaped profits will come.
As an investor, you should not fall into two groups. Be the third man, who knew the true value of an investment based on future potential of the first to know how they work and relate to each other.
In general, the gold price will rise if most investors do not believe in paper money. This can arise if the economic system or Inflation is expected to experience deflation.
To better understand, deflation can occur if Mercedez gives a discount of 80% was no one to buy. Inflation is the opposite. Mercedes to Sell 20% higher price was still exhausted stocks. And at this time that two gold will rise to the height of a blaze of glory.
When oil prices fell below USD 60 from November 08, many economists predicted that the world will suffer the threat of deflation. This is because, very severe economic downturn that makes the most of the lost earnings, leave out many who do not want to even go out for window-shopping.
USD value, stocks and real estate fell badly at the time so I have no other investors to save capital, except for gold. So also the gold price of $ 1,000, before falling back to USD 900 two months later. Gold prices fell at that time because some economic indicators showed the economic crisis is over; investors began to sell gold to invest in stocks, currencies USD and property back.
As of May 09, the world's investors really believe that the world economy began to stabilize and demand will increase. So also the price of oil neared USD 80 a month and a half later; that gold prices also go up.
Now, oil prices nearly flat or even go back to the level of gold prices remain stable but very high up. This much is driven by several factors, among others as some central banks as a reserve currency wholesale gold because the USD continued to slide (reserve currency in the USD). This can lead to over-Valued gold.
And there were also reasons many 'investors' street', which began flocked to buy gold when gold understand the investment profit. This causes the gold price over-rated.
These two factors cause the price of gold is driven by 'market gyration' of the 'fundamental value' of gold itself for the immediate future.
In my opinion, the price of gold will be having 'correction' (down slightly) before the price is flat for a while. The reason,
1) the world is undergoing a recovery process so the less the threat of deflation.
2) as long as oil prices do not continue to rise, the threat of inflation is also not very high.
These factors will keep gold prices will flat for a while: but if the oil supply suddenly diminish or occurrence of war between the superpowers of the world.
Questions and Answers
There are many options out there to consider when looking to build your portfolio. Gold investing has proven to be a popular option these days, posting gains over 100% since 2000 and steadily on the rise.
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