The secrets to investing in gold – a fundamental and technical picture

Gold is seen as one of the most valuable of the metals. Why? It is extremely rare in the environment. An interesting fact is that it is found 19 times less than other precious metals. This valuable ore has always played an important role in commerce and the modern monetary system – which is now in the focus of investors throughout the world.

How supply affects the price of gold

Estimates show that the gold reserves are sufficient for approximately 16 years of production. Most of which are located in the ”Black Country” -areas, where the gruvkostnaderna is high. In addition, the supply to be limited due to the fact that newly discovered deposits will be less and their quality will undoubtedly become worse.

Keep in mind that when it comes to the gold market is a mechanism for the regulation of losses and returns. The higher the price the higher the supply (mining becomes lönsamare). The lower the quotas affect the decline in production and supply. Bloomberg’s production forecasts for the coming years is on the decline:

You can’t forget about the recycling of gold – the rise of the supply in this area last year was 17%. The higher the gold price on the global stock market, the greater the amounts of tonnes of converted gold ore from the in the past finished products (1116,5 tonnes in 2016).

What is the role of the demand?

The second fundamental factor affecting the price of gold is demand. Market analysis of this råmetall is an indispensable and very important element. The main customers of the yellow metal are: central banks, the technology industry, investeringssektorn and jewelers.

The demand for gold throughout 2016 increased by 2% compared to 2015, and amounted to 4308,7 tonnes. Annual inflows to the ETF amounted to 531,9 tonnes, which gave the second best historical result. Juvelerarens demand and the central banks purchases have been worse than that in 2015.

In addition to the standard demand should also pay attention to the need for investment (the amount of metal purchased through ETF-funds). In 2016, they increased by over 70% at the highest level since 2012.

Perspective on the gold market in 2017

Gold priced in US dollars in 2016 ended positively. The price increased by 8.1% and it was the first positive result in four years. In 2017, as well as in a dozen months, provide the continuation of the political uncertainty in different parts of the world a chance for continued growth – we are talking about Germany, France, the expectation on the Brexit concerns over the u.s. presidentstrategin.

Gold is often considered as an alternative to printed money. Papperssedeln can theoretically be reproduced without restrictions. Gold is finite in size. The construction of new mines is very costly and time-consuming. Historically, gold has been an effective protection of the dollar’s real value. Råmetaller be considered as an effective protection for the value of money against inflation. There is a certain correlation between the market prices and increases in the market for precious metals.

Of course, we can not ignore the fact that gold is valued against the u.s. dollar – thus its future is dependent on measuring the yield on 10-year bonds and the u.s. dollar. If Donald Trump’s administration, can strongly stimulate the growth of inflation (and at the same time, lower interest rates on interest-bearing securities), then we can expect the movement of capital to gold (as a safe harbor). However, the expected interest-rate hikes in the Fed’s performance and the subsequent appreciation of the u.s. dollar block more dynamic guldvinster.

If you look at the technical chart, we see that the note accepts the trend line, and is conducted from the peaks in 2011, as we have seen many times in the past year and also 2017, the line tested. So far, the EUR / USD include the last few months as successful where the value of the Råmetaller increased by about $ 140 per ounce. However, it will be necessary to overcome LT and the resistance between the 1295.00-1300.00:

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