Experts warned about the fall in the price of gold in advance. For a long time, since the last years of the 20th century and up to 2007, the price of precious metal has steadily increased. This was directly related to the growth of the economy as a whole and the favorable conjuncture in the world market. The volume of investments grew, the industrial and construction sectors developed. The prices for natural resources, including the price of gold, had a clear positive vector. The slowdown in the growth of prices for this precious metal was the first symptom of the impending crisis. Although many participants in the world market did not notice this.
After the financial crisis broke out, a slight drop in the price of gold ceased, and a sharp increase followed. In this context, it should be noted that the precious metal is a currency, a raw material and an object of investment. Such a complex property makes it a special subject, the relation to which is different. When the financial crisis of 2008 began, many shareholders rushed to get rid of them and buy gold on the proceeds. Such a collapse in demand for this resource, naturally, gave rise to an avalanche-like price increase. But the very fact of owning a gold bar does not yet yield revenue. It is a form of preservation of life values.
And life values are quite familiar and necessary in everyday life items. To go by car, it must be refueled. At the gas station you can pay only with money, a "piece" of gold as payment here simply will not be accepted. For this simple reason, it is necessary again, as they say, to bring metal to the market. As a consequence, another decline in the price of gold takes place. Like all processes in nature and the economy, the price of any resources varies widely. Experts do not get tired of this, however, the trend change always happens unexpectedly.
The booming economy of China requires various resources. Oil, timber, ferrous and non-ferrous metals are supplied here from different regions of the globe. Are not an exception and precious metals. The prices for gold, as well as for any other commodity, are formed, proceeding from market conditions. As you know, the electronics industry is one of the largest consumers of precious metal. In order for electronic devices - computers, telephones, tablets - to be accessible to a wide range of consumers, they should have an adequate cost. And this means that you need to acquire the necessary resource at the lowest price.
In other words, the drop in the price of gold is fully approved by the electronics manufacturers. It is likely that this process will lead to lower prices for computers. To this we must add that the traditional consumer of precious metals is the jewelry industry. The manufacture of jewelry at all times required the source material of high quality. Precious jewelry is in demand in any economic situation. Thus, we can assume that the current decline in the price of gold is a temporary phenomenon. In the near future there will come a time when this process will flow in the opposite direction.