Blog Entry number 2: The trend of people buying gold.

    In this blog I talk about trending things in the world currently. I was thinking about something to write about when I looked at the price of gold. Have you looked at the price of gold lately? It only seems to only go up. Have you wondered why this is and if you should buy it. Today I will be talking about the reasons it has been trending so much and just a little background on it.

Photo from topone markets

    In this paragraph I would like to talk about some of the reasons why gold is up 60% year to date. The first reason is that gold has gone so parabolic is because of uncertainty in the trade market. Recently President Trump has decided to use twitter to just spew out whatever he wants. Making a lot of tweets about tariffs has made people scared of the U.S dollar. When there is uncertainty in the market that's when risk on assets such as gold become much more enticing. 

    The second reason gold has become so much more enticing is because of the weakening of of the U.S dollar. The dollar has lost about 11% of its purchasing power according to Morgan Stanley. That means if you held $100,000 dollars of your money in a checking account over the last year, then you lost about $11,000 dollars of purchasing power. Central banks saw this weakening and fled fiat currency to assets that can't be printed by the federal reserve. Over the past three years central banks have been buying 1000T of gold yearly compared to the average of 400-500T of gold prior.(According to WorldGoldCouncil)

Photo from Econofact

    In conclusion there is many bullish catalysts for gold but it all boils back down to the basics. Supply and demand. If the demand for gold continues to rise then the price will continue to rise. Gold thrives in times of uncertainty. The dollar getting devalued is very good for the price of gold and the Federal Reserve isn't going to turn off the money printer anytime soon. This is why gold has been trending this year.

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