Record Set as Gold Price Nears Platinum

Gold seems to be the talk around the water cooler these days. Whether you are buying it for jewelry or you are using it as a hedge against the volatile stock market, the price of this precious metal seems to be very expensive, more so than any other metal of its type. At one time, platinum was the big dog metal, the one that everyone wanted to get but simply could not afford. Now the tides have turned and gold prices have reached the prices of platinum and in very short order. The way the stock market has been, it is no wonder that the prices of gold have gone up so much, so quickly. Now in August, the price of gold has actually surpassed that of platinum, even if only for a short time. The two precious metals remain very close to the same price. Most people buying jewelry saw platinum as classier as it has always been more than gold in price. Gold, now that the economy is not doing well, is now the metal everyone is clamoring for and the price reflects this activity. Supply and demand is one of the ways that investments are priced. It is a common economic principle and also applies to retail goods and other items such as gasoline, which has also been a topic of many discussions.

This record is significant in light of the situations that have been prevalent in many of the financial markets and the housing market specifically. When the housing prices started to set records, many feared that the bubble would pop, sending the economy into a tailspin, which is exactly what happened. As the price of gold continues to set records, the bubble may become an issue. If the gold bubble pops, it will hopefully be due to a stabilizing economy. The difference between the two crises is that the housing bubble caused people to lose their jobs and go into foreclosure, but a gold bubble pop will most likely only affect investors and jewelry retail, the latter of which may actually benefit from the pop in the long run. Their high-priced inventory will take a hit, but their overall outlook will be very good for profit. The gold price is really the only precious metal that is making a move in the upwards direction and should continue to do so until the markets do stabilize.

The stabilization of the economy is the main goal of the financial sector as well as the government. Since there are so few jobs, it is difficult to increase spending from the very low levels we are seeing currently. Since spending makes up about 70 percent of the economy, it must be increased to help out the situation. Until there is a focused effort to create jobs, we will likely remain in this stagnant state and the price of gold will continue to go up, often surpassing platinum and providing a safe shelter for investors who are concerned about their financial future.