For some investors around the world, gold is believed to be a store of value. At the same time, many consider gold as a safe haven.
These assessments are not without reason. One of the reasons is that the value of gold commodities is not influenced by the interest rate policy set by the government. Hence, many people buy gold as a form of “insurance” against bad or adverse economic events.
Inevitably, the demand for and the price of gold increases when there is a threat of inflation or changes in the value of the dollar. Some investors view that gold will be safer than risky assets such as stocks and bonds. It can be concluded that the price of gold will tend to increase when the financial market is under pressure caused by government policies.
On the other hand and like other investment instruments, the price of gold is not only overshadowed by the potential for price increases but also the risk of price declines.
reaction of gold investors when gold prices fall