Economics Gold Market Essay
In my essay I will be talking about gold because I am very interested in the gold market it is a element that a lot people where as a jewelry, and so on gold is a very famous element. What is gold “Gold! Gold! Gold! Gold! ” wrote the poet Thomas Hood. “Bright and yellow, hard and cold. ” When the word “gold” comes to your mind the first thing you think about is jewelry, money, treasure and luxury. Gold is soft yellow metal. Its chemical symbol is Au, from the Latin word, Aurum.
Gold is one of the heaviest chemical elements. It is 19 times heavier than water. Unlike most metals, gold does not tarnish in the air.
It remains bright and shiny indefinitely. People first valued gold for this special quality. Gold market The gold market is a Monopolistic competition. The main feature of monopolistic competition is product differentiation which is quite prevalent in the gold market. The gold sold by different shops is different and they charge different prices for it for the same weight.Selling costs also become prevalent.
We see many advertisements and attractive posters for different shops selling gold. The costs incurred for these ads are called selling costs. These are vital to the concerned shops as they attract more customers even though actually they haven’t changed the price of gold as such. Also there are quite a few shops selling gold so there is a large number of buyers and sellers.
All these factors combined make me confidently say that the gold market is a monopolistic competition.Gold price history Gold is getting more expensive now a days because the our money is getting less worth. And gold is something that can’t lose its worth and money is just a piece of paper. If the interest rates are below the 2% the price of gold will increase very strong, and when the interest rate becomes 3% the price of gold will go down with 8%. The price of gold is worldwide the same and market bound that will say that the price is also made by demand and supply. ou can’t find gold anywhere you want there are a few places where you can find gold that makes gold so worth full.
Gold has always been a worth full element, so that is why people want to make jewelry of the gold, because the want to show that they wear expensive elements and show their status. That’s why gold Is a very interesting element. Price elasticity The price of gold is quite inelastic because the demand is getting more while the price is getting more as well. (like you can see in the graphs ).