The stronger US dollar is a short term blip in the road. Gold is a solid investment and will continue to be so.
Gold’s recent surge in price is due in large part to the United States of America and their current economic crisis. In fact, many of the gold buyers are investors. Their investment in gold has not been forced on them by any of the economic factors affecting the economy in the United States today. Gold is not a government reserve like silver or gold coins.
Gold is no different than oil or gas. It does not depreciate or appreciate according to how the world economy affects the price. It is the same way that an investor would not want to buy stocks based on the recent price fluctuations of a company. They do not want to make a quick decision and hope the company bounces back.
There is still time for the stronger dollar to bounce back. A stronger dollar is already starting to come back into the economy. The weaker dollar is causing more of a negative effect on the economy than the stronger one. The weaker dollar causes people to pay more for imported goods and the higher interest rates that are on loans also cause people to pay more for the same things.
The stronger dollar has been an incentive for people to get out of stocks and bonds as well. They know that if the stronger dollar becomes more stable and people’s income becomes more stable they can move their money to stocks and bonds again and wait until the market has a little more stability. This is something that investors have been doing for years as they wait for the better economic times to come around again.
There has never been a time in history that has been as profitable as now with the global economy as it is today and that is why the real estate bubble has burst. People have been able to buy and sell real estate for a lot less money because the dollar has dropped in value so much. As the stronger dollar continues to rise people will be buying more real estate.
While the weak dollar is causing the weaker economy in the United States to crash it is also helping the people in the middle-class. Because the stronger dollar is making it easier for people in the middle-class to buy more of the things they want and have been losing for many years they are feeling good about their economic future. The weaker economy is hurting everyone and it will take a little while for the people to recover from this. In the meantime the strong dollar should bounce back and help the middle-class feel secure about what comes ahead.
If the stronger dollar bounces back then gold will be a lot more attractive to investors. There are many people who invest in gold because it is a safe investment and also because it has an intrinsic value which is worth more than the dollar value that is currently being traded in it. That is why there is so much demand for gold and not as many people investing in stocks and bonds.