Gold Jewellery Selling Fast But Why?

150,000 tons of gold has been mined and from this 108,000 is kept in banks as investment. From that 2,400 tonnes of gold is mined each year. Mined gold is of low importance when 22ct gold you realize that 650 tonnes of gold changes hands in the London stock market EVERY DAY!

So how does this change the value of gold?
Well basically [and this is very basic]. The value of gold depends on the confidence held in hard cash. The lower the confidence in nominal interest rates, US dollar's exchange value, inflation expectations, the yield curve and credit spreads essentially associates a lower value to the pound or dollar, so all the bankers run and stock up on gold.

So as a round up when the stock market crashes, house sales are at an all time low and the exchange rate is in bits; this is when the price of gold rises and when the stock exchange returns to a frantic normal state and the property market stabilizes, the cost of gold jewellery is lowered.

Think about it on a larger vs small scale. You and I (average Jo) purchase gold jewelery when jobs are easy to find the mortgage rate is at all time low and we have cash in our back pockets. This is the same for bankers investing on the stock exchange in building firms and large corporations hoping for a good return.

Compare the British pound with the American dollar the same fluctuations Indian gold jewellery happen when comparing gold with the pound or gold with the dollar. Gold is basically its own currency and right not its kicking ass.



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