The beginning of the year 2013 saw gold prices fluctuating in the international market. Gold, considered as a safe haven asset, saw a drop in its demand as the global economy improved and investors moved towards riskier assets such as equities.
On January 2nd, gold prices opened at $1670.50 per ounce and hit a low of $1657.00 on January 4th. The metal continued to trade lower for the next few days, as a better-than-expected US employment report boosted the appeal of riskier assets and reduced demand for gold as a safe-haven investment.
However, towards the end of the month, gold prices started to pick up as investors sought refuge from uncertainty in the eurozone. The ongoing debt crisis in Europe and the political turmoil in Italy led to increased demand for the metal, pushing prices higher. On January 31st, gold prices closed at $1695.40 per ounce, up from the lows seen earlier in the month.
The Global Economic Crisis Boosts Gold Prices.
The past few years have been tough for industries and markets worldwide, with the sovereign debt crisis in Europe and the looming fiscal cliff in the US adding to the already uncertain and unstable economic conditions. This challenging environment has only served to reinforce gold’s reputation as a safe haven investment during times of economic turmoil.
Gold’s value as a hedge against risk has been proven time and time again, with numerous global economic risks contributing to its rising prices. On the other hand, platinum, being primarily an industrial metal, struggles during economic downturns due to reduced demand from industries. Despite platinum’s rarity and its status as a premium metal with most of the world’s deposits located in a few countries, particularly South Africa, the state of the economy has brought its value down to a discount compared to gold. This trend started in the latter half of 2011 and continued throughout 2012.
In conclusion, the month of January 2013 was characterized by a drop in gold prices in the early days of the year, followed by a pickup towards the end of the month. The uncertainty in the eurozone and the ongoing debt crisis led to increased demand for the metal as a safe haven, driving prices higher.
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