Econometer: Worried about drop in gold prices?
Jonathan Horn, U-T SAN DIEGO
Friday, April 19, 2013
Kelly Cunningham, National University System
Although concerns over currency values are widespread, as far as gold retaining value is not the problem. Heavily indebted European Mediterranean countries selling part of their gold reserves caused prices to fall. Many developed countries with the most daunting debt problems, including the U.S., have relatively high gold reserves. Cash rich, but gold poor, creditor nations are eager to purchase gold from bankrupt nations selling at distressed prices. They thereby also become less dependent upon the U.S. dollar as reserve currency for international exchanges. For consumers, the decline in price may be a last great opportunity to invest in gold.