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  • Suggest You - Another Way of Looking at the Gold Price Meltdown

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    Until recently gold prices have been on a tear. After decades of going nowhere, gold has had a year of steadily rising prices, that is until two weeks ago. It appears the hedge fund investors who bid the price up, have decided to take their profits. Gold prices plunged and many financial analysts have proclaimed that the bull market in gold is over. Is it?

    Price charts are one way to look at the situation, however we need to dig deeper into the fundamentals to see what the prospects are.

    As the hedge fund investors have dumped gold, there is evidence new hands are coming into the market. As some investors leave, and new ones replace them, the volatility in gold prices will remain high. What we need to ask is are these new investors speculators or is there some fundamental reason new investors are coming into the market?

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    ge fund investors who bid the price up, have decided to take their profits. Gold prices plunged and many financial analysts have proclaimed that the bull market in gold is over. Is it?

    Price charts are one way to look at the situation, however we need to dig deeper into the fundamentals to see what the prospects are.

    As the hedge fund investors have dumped gold, there is evidence new hands are coming into the market. As some investors leave, and new ones replace them, the volatility in gold prices will remain high. What we need to ask is are these new investors speculators or is there some fundamental reason new investors are coming into the market?

    Lets start by lookin

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    er. Is it?

    Price charts are one way to look at the situation, however we need to dig deeper into the fundamentals to see what the prospects are.

    As the hedge fund investors have dumped gold, there is evidence new hands are coming into the market. As some investors leave, and new ones replace them, the volatility in gold prices will remain high. What we need to ask is are these new investors speculators or is there some fundamental reason new investors are coming into the market?

    Lets start by lookin

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    investors have dumped gold, there is evidence new hands are coming into the market. As some investors leave, and new ones replace them, the volatility in gold prices will remain high. What we need to ask is are these new investors speculators or is there some fundamental reason new investors are coming into the market?

    Lets start by lookin

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    main high. What we need to ask is are these new investors speculators or is there some fundamental reason new investors are coming into the market?

    Lets start by looking at the retail investors. One important component of the price of gold is the retail investors in India, China and West Asia. Traditionally these investors have bought gold in the form of jewelry. Jewelry demand in these countries does have an impact on gold prices. The significant point here is investors in these countries are now accumulating gold in forms other then jewelry. In 2005 the investment demand for gold in these countries has risen from between 20% and 34%. The strong demand continues into the first quarter of 2006. During this same period of time, demand for gold related Exchange Traded Funds has risen 23%.

    India is the largest buyer of gold in the world. Indian inve

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