Gold 101

Gold prices have been volatile. In 2009, gold sold at $800 an ounce; in 2011, gold traded at $1900 an ounce; and in April 2013, gold  traded at $1300 an ounce.


Some commentators see gold as a 'barbarous relic'. These believe, the price of gold will decline to $1000 an ounce by 2015.  If this occurs, confidence in gold will decline in the medium term.


Gold has however retained value long term. Goldbugs continue to encourage the purchase of gold as an investment asset. All currencies have declined in value compared to gold, over the last thirty years. The problem with gold lies in short term speculative trades. Gold's short term price is distorted by thin markets and large speculative futures holders. Speculators drive a highly volatile short market, making price predictions impossible. Investing in gold is only encouraged to hedge against long term currency depreciation. Gold can also be used to back a currency and thus counter currency depreciation. Something the returning zim dollar will require.