Buying gold still makes sense despite price collapse | Bangkok Post: opinion

Opinion > Opinion

Buying gold still makes sense despite price collapse

  • Published: | Viewed: 3,096 | Comments: 4
  • Newspaper section: News
  • Writer: Kenneth Rogoff
- +

In principle, holding gold is a form of insurance against war, financial Armageddon and wholesale currency debasement. And, from the onset of the global financial crisis, the price of gold has often been portrayed as a barometer of global economic insecurity. So, does the collapse in gold prices _ from a peak of US$1,900 (59,600 baht) per ounce in August 2011 to under $1,250 at the beginning of July 2013 _ represent a vote of confidence in the global economy? 

To say that the gold market displays all of the classic features of a bubble gone bust is to oversimplify. There is no doubt that gold's heady rise to the peak, from around $350 per ounce in July 2003, had investors drooling. The price would rise today because everyone had become convinced that it would rise even further tomorrow.

Doctors and dentists started selling stocks and buying gold coins. Demand for gold jewellery in India and China soared. Emerging-market central banks diversified out of dollars and into gold.

This article is older than 60 days, which we reserve for our premium members only.You can subscribe to our premium member subscription, here.

4 people commented about the above

Readers are urged not to submit comments that may cause legal dispute including slanderous, vulgar or violent language, incorrectly spelt names, discuss moderation action, quotes with no source or anything deemed critical of the monarchy. More information in our terms of use.

Please use our forum for more candid, lengthy, conversational and open discussion between one another.

  • Latest
  • Oldest
  • Most replied to
  • Most liked
  • Most disliked

    Click here to view more comments