"Walk the gold trails of my good friend, do I. On my feet are "strong sole" of thick leather, purchased with much knowledge of physical gold. These shoes not go bare before our journey is done. On trail I see your "thin sole" investments cast aside and scavenged by beasts."
The thin sole is the money that does not have any intrisic value. The value is only based on perception and debt. The strong sole is the money that keeps its value and is less affected by the economic factors like inflation.
But coming to Gold. The concept of Spot gold has been traveling all through the arc of western bullion market. Spot gold trading is put forth for settlement two business days from the day of trade. Here, business day is defined as a day when both London and New York bullion exchange are open. Supply and demand theories do not move the gold market that much. It’s the interest rate differentials along with spot prices which are instrumental in freezing and melting the bullion market. This determines the volatility or the lack of it as far as gold price movement is concerned?
