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Gold Fluctuation

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Gold Fluctuation
Table of Contents

Topic Approval Sheet i

Acknowledgement ii

Abstract iii

Chapter I 1

INTRODUCTION 1

Background: 1

Purpose/ Objective of the Study: 1

Methodology: 2

Scope of the Study: 2

Limitation of the Study: 3

Structure of the paper: 3

Chapter II

CONCEPTUAL FRAMEWORK 4

Chapter III

FACTORS INFLUENCING GOLD FUTURES 6

US dollar and gold price……………………………………………………………………….6

Central bank reserve policy and gold price……………………………………………………8

Demand and supply of gold and its effects in the price………………………………………11

Inflation and gold price……………………………………………………………………….15

Investment demand and gold price…………………………………………………………...16

Geopolitical scenario, macroeconomic changes, and gold price……………………………..18

Gold vs. Oil as an investment alternative………………………………………………….…….19

Chapter IV

CONCLUSION 21

References

Chapter I

INTRODUCTION

Background:

Gold has attracted investors throughout the centuries, protecting their wealth and providing a 'safe haven ' in troubled or uncertain times. This appeal remains compelling for modern investors, although there are also a number of other reasons that underpin the widespread renewal of investor interest in gold. It provides insurance against extreme movements that often occur like war, economic crisis, changing monetary policies and so on. Individual or institutional investor tend to invest more in gold in order to diversify their portfolio by not only holding the US dollar as a reserve but also gold as well to hedge against the falling price of US dollar, to hedge against inflation, to provide higher liquidity at the time of urgency and to provide insurance and economic security against unexpected events like the recent economic crisis. There are certain factor that influences the price of gold from time and again. Some of these factors are US dollar currency,



References: William F. Butler and John V. Deaver, “ Gold And The Dollar”. Accessed on December 28th , 2009. James C. Dolley, “Inflation, the Balance of Payments, and the Gold Flow”. Accessed on 31st December, 2009. Accessed WebPages: http://www.usagold.com/gildedopinion/vaneedengold.html) (accessed on 3rd January, 2010) http://www.blanchardonline.com/beru/gold_vs_stock.php(accessed on 3rd January, 2010) http://precious-metals investing.suite101.com/article.cfm/gold_price_forecasts_why_so_high_part_3(accessed on 4th January, 2010) http://www.gold-eagle.com/editorials_05/barisheff042205.html(accessed on 4th January, 2010) http://goldnews.bullionvault.com/gold_oil_ratio_121520093(accessed on 5th January, 2010) http://www.zealllc.com/2004/goldoil4.htm(accessed on 5th January, 2010) http://www.ameinfo.com/73907.html(accessed on 5th January, 2010) http://www.gold-eagle.com/editorials_00/wanniski061900.html http://www.zealllc.com/2005/gorex3.htm(accessed on 6th January, 2010) http:// www. Bloomberg.com (accessed on 6th January, 2010) http:// www http://www.indianexpress.com/news/gold-set-to-shine-as-investment-vehicle-in-2010/558446/ (6th January, 2010) http://www.fool.com/investing/mutual-funds/2007/09/28/gold-vs-the-sp-500.aspx (6th January, 2010)

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