Why People Are Selling Gold

Investors have recently been selling gold after a runup in gold prices that has lasted almost 12 years. The recent retraction in gold prices has its origin in many different factors that will likely lead to further volatility in gold prices for the coming years.

For one, after the runup in gold prices, investors are taking a break. As such, gold prices are consolidating at these levels before possibly moving higher. No commodity or any type of investment goes straight up and when it does, as gold has, investors get uneasy and begin to cash out their investments until there is more support for gold prices. As a result, many investors are selling gold in order to preserve their recent gains.

Gold prices are strongly correlated with the value of different currencies, particularly the United States Dollar. As the dollar decreases in value, due to printing or devaluation of the dollar which causes inflation, the value of gold increases. For many investors, this is what is attractive about gold, it acts as a hedge against inflation. Recently, the dollar has been appreciating in value despite the printing of it by the central bank. As such, gold has been decreasing in value. Individuals who see or predict this are therefore selling gold in the anticipation that they will be able to buy it back after the dollar begins to be hit by additional inflation.

Gold has many fluctuations and will not simply increase or decrease in one direction. While buying and selling gold will possibly lead to solid profits, you may also miss out on appreciation in gold prices over time. More info: sell gold Spring

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