Among the events that could increase the price of gold, there aren’t only crisis and wars. There is also growing economic markets, which are going to need gold.
By reading the title of this news, you can legitimately ask yourself this question: “Why would it be bad news?” ; and the answer is simple: “It would be very good news for the global economy. “. But we never claimed that all events with a major economic impact would necessarily negative.
In red, the newly industrialized countries. In blue the emerging markets.
On one hand, the price of gold could react to this differently than the usual way; that is to say it could rise as the global economy rather than react inversely to the overall trend. The reason is obvious, emerging countries are in crucial lack of assets to stabilize their own currencies. Gold has been used as a stabilizer since a long time, and these countries may wish to do such as China, that is to say, acquire gold and while their economies are growing.
The biggest emerging market: China, Russia, India, Brazil.
On the other hand, such an economic alliance between emerging countries is unlikely for several reasons. Because they are compete directly on very similar areas, there are major ideological conflicts between them, they all have a willingness to selfishness … there is not much chance of forging a great economic alliance between these countries.