Chart of the week – Gold

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It is often misunderstood as to why the gold price is important. In itself, it is not so important, as it has no real industrial use, however as a gauge of sentiment, it is a very emotional commodity.

The main economic reasons for its existence are:

  • As an alternative store of wealth;
  • As a hedge against inflation and;
  • Jewellery.

All the above three reasons are “emotionally charged”. The first two are “emotional” because they are fear related, and the third one is emotional because you buy an item to express your affection for another person.

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