All that glitters is not gold.
The industrial consumption of gold has gone up around 1% per year for the last 10 years but gold prices have gone up 600%. This tells me that gold is overpriced.
Like any other precious metal the gold prices are determined by supply and demand. When a precious metal goes up in price there is more investment in the tools that mine the metal. The gold mining companies can then mine more gold..
The stockpiles go up and the
value decreases until the mining companies canít make a profit. So there are fewer mining companies and over the years the stockpiles decrease until the stockpiles are low and the price increases. The process repeats itself.
What goes up must come down. In the case of gold prices I think will happen sooner rather than later. Investers be wary of gold prices.
We have been in a 10 year bull market. Gold has become like the tulip phenomena that happened in turn of the 19th century in Holland.
Gold has been valuable ever since its discovery because it is hard to find and difficult to mine.In recorded history there has only been enough gold to fill a cube 20 meters by 20 meters
Its uses are coinage jewelry and electronics because of its low electrical resistance properties. gold is a highly a maluable and can be made thinner than the thin-est sheet of paper. It is non corrosive so it lends itself to plating items you want to last a long time.
My father was a commercial artist and sign maker and I can remember him putting gold leaf signs on office windows.
Gold is found in two ways through hard rock and placer mining. Hard-rock mining entails dynamiting through solid rock and is the most expensive way of finding gold. Placer mining is a method of extracting gold from the bottom of river beds and streams. A sleuth or panning is used.
Because gold has a higher specific gravity or heaviest of all metals it will settle to the bottom in flowing water of a device that is grated while the other particulants are washed away. Then it is further extracted with mercury.