Between Friday 5 and Thursday 11 August the price of gold rose over 10% – a move that took the yellow metal from $1,644.20 to $1813.80 per troy ounce.
As anyone following the silver market in April and May of this year will know, an extended ‘parabolic’ rise in the price of an asset tends to be followed by a similarly violent fall. Therefore yesterday’s pullback in gold should be welcomed by anyone participating in the metals ongoing bull market.
The price of gold is being driven higher by demand from investors who are fearful of losing their wealth and are looking for a store of value. They are right to be fearful. Threats to their wealth include: debt default, currency devaluation, stock market falls, capital controls and inflation.