For a long time Gold has been a hedge against inflation or an alternative hard currency.
But lately Gold is betting on fear. Meaning when there is fear in the market, Gold goes up. When the fear subsides, the Gold goes down.
Presently there is a strong fear that the Federal Reserve will start tapering and that will affect global growth. So since December 2013 Gold has risen about 11%.
However there is a big consumer demand for Gold in China and India, where economic worries have risen. Swiss refineries are working overtime to produce smaller denomination Gold bars as preferred in Asia.
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