What made the gold market drop like a lead bar? any suggestions?
The risk for inflation has not dropped so this drop is a mystery to Me.
I am not an expert by any means, but I would venture a guess.
First it was a bubble that burst. (Duh)
Why the bubble?
*Normal investors use gold as an anti dollar (the US dollar is no longer based on gold). The idea is gold will get stronger when the dollar is weak. Stock market was weak gold was invested in.
*Consumer investors were inundated by commercials to buy gold. The value was on a natural rise so it seemed like a good idea. They bought gold increasing the value at a greater artificial rate.
*Consumer investors and normal investors saw the artificial (most likely not know artificial by the consumer investors) so they increased investments further increasing the artificial rise.
*The normal investors ready to get back into the stock market, because the stock market has recovered, quickly got out of the gold market lowering the value. A small correction.
*Consumer investors seeing the drop in gold stopped believing the commercials and increased the correction.read more collapse
do the opposite of what the crowd is doing and your investments will do better than if you follow the crowd. When everyone was panicking and getting out of stocks over the last 6 years, my wife and I increased our investments into our Roth IRAs and have seen our money approximately double since 2008. When gold hit 1,700 and everyone was saying to buy, we sold what little we had. By the time the media and general public are talking about "great investments", the time to get in is OVER. It takes a strong backbone to stay in when everyone is panicking, but over the long term it's always worked out.
To answer your original question: It was overpriced, and this always happens after a run-up. Real estate, like gold, was seeing massive speculation that led to the crash 5 years ago, and just like gold, real estate is a tangible commodity, but was still susceptible to a "bubble" effect. The ability to make short term gains and lock them in is limited to a very few people, and based on luck.read more collapse
- Jun 29, 2013 6:42 PM
- Asked By
- 19 times
- Recently Viewed
- 1581 times
- Voted Against
- 0 times
- Voted For
- 30 times