A regular issue in the gold market is what influences the price of the precious metal. Most people rationally believe that supply and demand statistics in the physical gold market will determine the price. Read the full story

Gold forecast remains bullish as it continues to provide a hedge against weakness in fiat currencies and further confusion in the markets. Gold would be treated as the only solid asset Read the full story

Gold is exclusive because it does not bring any credit risk. Gold is no one’s liability. There is no risk of non payments for a coupon or redemption for bonds and that a company will go out of business, as for equity. And dissimilar to a currency, the value of gold cannot be affected by the financial policies of the issuing country or destabilized by inflation in that country. A 24-hour trading, wide range of buyers – from the jewelry sector to financial institutions to manufacturers of industrial products – and a wide range of investment channels available, including coins and bars, jewelry, exchange-traded funds, certificates and structured products, makes the liquidity risk very minimal. The gold market is vast and profitable, because of the fact that gold can be traded at narrower spreads and more rapidly than many competing diversifiers or even mainstream investments.

Gold is subject to market risk but many of the risks associated with gold prices are very different from the risks associated with other assets, a factor which enhances gold’s charisma as safest and most secured investments. The specific risks, to which bonds and equities are exposed, including stress on the health of the government and corporate sector during an economic downturn, are not shared by gold.

Volatility is a type of measure for market risk. It measures the spreading of returns for a given security or market index. If an asset is volatile, risk increases. The gold price in general is less volatile than other commodity prices. This is because of the depth and liquidity of the gold market, which is sustained by the availability of large above-ground stocks of gold. Because gold is almost everlasting, nearly all of the gold which has ever been mined still exists. Unlike many other commodities such as, oil or platinum, the geographical diversity of modern mine production further reduces the chances of supply shocks from any specific country or region having an unnecessary impact on the price. As a result, gold is to some extent less volatile than heavily traded blue-chip stock market indices such as the FTSE 100 or the S&P 500.

Gold has dropped roughly twelve percent since unusual record of $1,226.10 in December as the dollar gained on escalating fiscal worries in the euro zone. The month of February 2010 is the best time to invest in Gold. Read the full story