Read the following article about gold. What is happening to the price of gold? Why does it have value? Why is the price going up? How could governments affect the price of gold with interest rate changes? What is meaning of a bubble in terms of investing? Do you think gold is experiencing a bubble?
8 Comments
Henry Cakebread
4/21/2011 02:55:07 am
The price of gold is going up right now. It's valuable because of what it stands for in the global market, beacuse it doesn't have a real use, unlike oil. It's also judeged as a rival to other currencies in the World. The price is going up because more and more people are putting their money in metals and it has caused the price to go up. By changing the interest rate on gold, governments could stop the rise of value in gold and "prick its bubble." In terms of investing, a bubble means something that suddenly starts to go up, but will only go up so far and then "pop" or crash. An example would the recent housing market bubble.
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Lauren Brown
4/21/2011 03:03:32 am
Prices of gold are rising, and it is said to be at, "nominal highs." Gold has value because for thousands of years people think it does, it was used as a way of currency unlike oil which is much more valuable and usueful to us. Gold has some value because many people are putting their money into it. A bubble in investing means that in this case gold is not set to one price making it a constant group it goes up and down and sometimes rises like stated in this article.
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Chelsea Hoff
4/21/2011 04:59:27 am
The price of gold is "setting another nominal high". It has continued to rise in price year after year. Some people claim that it will have a bubble effect and that someday the price will fall, due to the fact that it is a precious metal. Although gold doesn't seem to have this effect. Due to the fact that it is shiny, has a reputation of being expensive, and it is scarce; gold continues to hold its reputation and price value. With interest rate changes governments could affect the price of gold by "pricking the bubble" that gold is said to have on the charts. In terms of investing, the bubble is when a good increases in value until it reaches the exponential phase that marked dotcom stocks. But gold just keeps rising inexorably, it hasn't reached the bubble phase yet.
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Mayra Hernandez
4/21/2011 10:41:11 am
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Jose Hernandez
4/21/2011 12:53:29 pm
The price of gold is rising. It has reached a new nominal high surpassing $1500 and the value rising each day. Based on the recovering markets, the interest rates are high and can be a possible factor for the price to rise; however, they feel it can fall. Gold has value because it is known to be a precious metal. Another important reason gold has value is because it is a source for currency around the world before the creation of "paper" money. Due to the fact that modern currency have no decent yield, it becomes an opportunity cost for gold. The fact that gold is shiny and scarce can be a factor for the price to go up. Gold is an inelastic product and goes into the many products we handle, there is a deficiency of supply around the world and from the poor economy and inflation can cause prices to rise. The government can affect the price by raising interest rates. They "prick" the gold and its affect on the charts. When it comes to investing, the situation of the bubble becomes good until the point when the market goes down. Gold is going to keep rising assuredly but all we can do is wait and see the moment when gold reaches its bubble.
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Ihtisham Khan
4/21/2011 01:53:21 pm
The price of gold is raising. It has reached a new high at $1500 a troy ounce. Gold has value because in some countries it is used as currency and it is used for things like jewlery. The price of gold is going up due to the fact it is scarce and people buy it alot as jewelry females more than guys as long as there are females, they will buy gold and companies can jack up the prices. The government can affect the prices by raising the interest rates. I think the meaning of bubble in investing is that the prices is going up and filling the bubble and eventually something is going to pop the bubble and prices will decrease. I think gold is experiencing a bubble right now and eventually the price will go down.
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daisy lopez
4/21/2011 04:27:22 pm
the price of gold is going up. gold isint as valueable as oil which is something that we all depend on unlike gold. gold is seen valueable by the people because thats the waya society makes us believe. also, people are spending money on metals so this makes gold prices go up. government can pretty much take control over this by creating the "picking bubble" which basically means that gold will keep gong up and we just have to wait and see what happens to its value.
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Emily Lider
4/21/2011 04:33:38 pm
As we read in the article, the price of gold is increasing, even to hitting the price of $1500 a troy ounce, which was a normal high. Gold has value because it is considered a currency to some people in very remote countries and also a precious metal. They state in the article that gold is in the run against other currencies in the world at this time because of the problems that the main currencies (Dollar,Euro,and Yen) are facing. It is said that with the rise in inflation, economic, and natural disasters in these countries has caused the currency to become less valuable. Governments could affect the price of gold by raising and changing the interest rates on the product and slowly affect the business. Also, the meaning of bubble investing is that things will suddenly start to go up until it reaches the breaking point and begin to fall (that is when it will reach its exponential phase and change the price of stocks in the market). However, at the rate of gold right now it is still rising Inexorably and will continue at the speed it is for now and has not reached its bubble. The people will have to wait and watch the market to see the changes.
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