For the past decade, the gold price increases tremendously from merely USD270 (RM1,026) per ounce (oz) in early 2002 to all-time high of USD1,913 (RM5,685) per ounce (oz) 23rd August 2011. That was 608% increase in US Dollar or 454% in Malaysian Ringgit.
However, since reaching all time high, the price gradually went down to less than $1,200 per ounce at the end of 2014. 2013 is the worst performing year, where the price drop a massive 27%. 2014 also register a price drop in US Dollar albeit small drop but the price increase in Malaysian Ringgit which was due to sudden drop of Ringgit versus US Dollar.
Gold once perceived as a safe haven during uncertainties or economic crises and a hedge against inflation but why it dropped so much? Read the article “Breaking the Myth of Gold as the Ultimate Store of Wealth” and “Why Gold is Damaging to the World’s Economy” which were written by the author of 259 Trillion Vs 5 Trillion book series. Maybe the article could explain why.
I made a compilation table to show the annual gold price changes for the past decades in both US Dollar and Malaysian Ringgit as below.
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In this article, we shall discuss the over-hyped claim that gold is the ultimate store of wealth. Gold is accorded such esteemed honors freely, but where are the facts? Is it true that gold’s value would protect its holders from the ravages of inflation? Is it true that our wealth, our hard work and sweat as it’s often called, can be stored ‘inside’ a piece of yellow metal?
The yellow metal is often hyped as very stable in value, but is there any truth to it? Take a look at the value of gold, priced in US Dollars below.
A prerequisite for trading the forex market is the ability to read a currency chart. In this article we cover the basics of forex charts – what the chart measures and what it can reveal about the relative strength of a currency.
To begin, a chart is simply a historical representation of the price of a security over a given period of time. Simply put, a chart shows how price of the currency (reflected on the vertical axis) has fluctuated over time (captured on the horizontal axis).
Let us take the example of a EUR USD chart to make this more specific. Remember, currencies trade in pairs so the exchange rate reflects how many dollars can be purchased with one euro. The current exchange rate is roughly 1.29, which means each euro is worth 1.29 dollars.
Central banks in countries namely United States (US), Germany, France and Italy hold 70% of their reserve in gold. What spurs them to use gold as reserve is their loss of confidence towards the two world leading currencies, the US dollar and Euro. Gold is viewed as a federal reserve and is a counter against the swing of the US dollar.
United States, who is the leader in the world of economy, has been facing one of the roughest times with its shrinking economy and increasing unemployment rate. Since the concluded of the Great Recession 3 years ago, the country’s employment rate has topped 8% for each month with job growth slowed drastically in August. Employers only added 96,000 jobs which indicate a fall from 141,000 in July, far below the 12 million over citizens who are still unemployed.