Okay, first and foremost, I’m a jeweler. I design and sell jewelry. I know a whole lot about precious metals, diamonds, and other gems. I know a great deal about fine Swiss mechanical watches. You might even call me an expert on things like engagement rings, wedding bands, pre-owned Rolexes, and Cartier pendants.
I am NOT an investment advisor.
So, I’m putting this blog post up for your enjoyment and not to tell you what the right financial decisions are for you. I buy gold and other precious metals as well as gems. I do this to recycle the materials as much as possible into jewelry I sell. I have some knowledge but none of this should be considered investment advice. I’m just sharing things I believe with my limited understanding.
Okay, got that out of the way. So now, I can answer the question.
Gold can be volatile in the short term but the long-term volatility is far less impactful. Here are some things to consider when thinking about gold's volatility:
The price of gold is influenced by many factors, including:
The value of the dollar: A stronger dollar tends to lower gold prices, and vice versa.
Inflation: Gold prices tend to rise when inflation rises.
World events: Gold prices can be affected by geopolitical events that impact the supply or create a lack of confidence in the value of the dollar or economic prospects.
Central bank purchases: Gold purchases by central banks in various countries can impact the price worldwide.
Supply and demand: Like any other item, the greater demand for gold, the higher the price. Because the mining and refining industries can’t respond quickly to increasing demand, prices remain high.
Gold is typically considered a safe haven investment, shelter in the storm, so to speak. Not directly tied to any particular industry, it is typically considered a hedge against all of the other investments. The theory is that you may not make as much when things are going great but when things are going poorly, gold can rescue you.
As a jeweler, I think of gold as a raw material rather than as an investment. I use it to make rings, necklaces, and brooches. How you view gold is up to you. If you have some you’d like to sell, I’ll be glad to offer you a fair deal for it. Give me a call or drop by my La Jolla Showroom.
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