The recovering market has led investors to buy less gold and other precious metals. Gold is profitable to investors when there is economic trouble on the horizon. Gold is like a safe haven for investors when the cost of the dollar is devalued by inflation. When the dollar gains value they typically dump their holdings.
The demand for gold has increased among consumers especially in the countries of China and India. The attraction for consumers is the decrease of the price of gold. The average gold price fell by 12% to 1,415 per ounce which resulted in consumers rushing to buy jewelry, coins and gold bars to take advantage of record low cost.
It is interesting to note that China and India are not the only consumers buying up gold, because the demand for gold is also on the rise in the Middle East and Turkey.
Will consumers elsewhere take advantage of the low prices for gold? If gold prices continue to drop the demand will be seen in other countries as well.