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3 Reasons Gold Could Lose Its Value

A person holding Gold coins in their hands

Gold has a history of standing strong and being extremely lucrative during economic instability, while other investments fall dramatically. Most investors turn to precious metals when the value of stocks declines due to currency depreciation. Nevertheless, this does not necessarily mean that the price of Gold will decrease as the economy grows. Even if the price does fall, it does so minimally and quickly.

Ever wondered what affects Gold prices? Can Gold lose its value? If it loses its value, can it bounce back? Why is Gold considered the most sustainable precious metal? This blog will help you in uncovering the answers to all these questions.

Look at this guide to understand why Gold could lose its value.

1. Demand And Supply

The price of precious metals changes when demand increases. Gold is a commodity that is constantly in demand, making it a better investment choice compared to other valuable metals. However, the Gold price can go down if the demand rate is reduced.

Aside from the current global economic downturn, Gold has repeatedly proved to be the safest investment option. The multiple events that rattled the US economy caused Gold prices to rise throughout the economic slump of the 2000s. It is thought that it is advisable to hold onto Gold holdings during economic turmoil based on historical events. It is evident from studying past downturns that Gold investments may be profitable even in the event of significant inflation.

2. Market Reflections

Gold prices have fluctuated over the preceding ten years. Gold’s price in 2011 was valued at $1,360, and it increased until October 2012, when it reached $1,745. The price of Gold plummeted in November 2015, when it reached $1,069 per ounce. Following that, its price started to increase, and by the end of the decade, it reached$1,866.

Focusing on the international market and the actions taken by the federal government and Federal Reserve can help you comprehend the peaks and troughs of Gold prices. At the time, the US was trying to cope with low inflation rates, which made precious metals useless as an investment tool. As a result, there was an upsurge in the liquidation of Gold, which lowered Gold prices.

3. Hyperinflation

A stock exchange company in the US

Ironically, both Gold and the US dollar have increased in line with macroeconomic trends over the past few years. This year’s increase in the price of Gold has been attributed to several socioeconomic factors, including the impact of the China-USA dispute and the global liquidity ratio.

Buy Gold Bullion And Coins Online With Orion Metal Exchange For Your Retirement Plan

If you’re investing in precious metals for the first time or don’t have sufficient knowledge about how Gold and Silver investments work, we can help.

At Orion Metal Exchange, we’re one of the most trusted Gold investment dealers in the US. We help our clients understand the intricacies of Gold and Silver investments and open their IRA accounts with the assistance of our IRA department team. Our IRA team can also help you get swift distributions. Reach out to our team for more information about our premium services.

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