Gold is precious, traditionally valuable, and stable. That last one piques interest if you ask us. Why is gold so stable? Or a better question is, has it always been? In today’s blog, let us address what REALLY affects the gold price.
But then again, has gold seen more considerable volatility–because of reasons besides the macroeconomy, maybe?
The global financial crisis triggered in 2008 after the fall of The Lehman Brothers (the fourth largest investment banking firm) set into motion a series of events responsible for the Great Recession. This resulted in the price of gold rising from $700 an ounce (about 28 grams) to about $1900 an ounce by 2011. A significant reason for this was that people had lost faith in the institutions.
Such events are called black swan events and are rare. More importantly, gold has usually outperformed all other assets during these events.
It’s difficult to gold’s risk-free and time-proof nature. Let us know what else you would all like to read?