How Gold Lost Its Glimmer
Forbes India|March 29, 2019

Long considered to be resistant to economic and market forces, the yellow metal has fallen on harsh days, but still holds promise.

Anand James
How Gold Lost Its Glimmer

Sleep is my greatest enemy.” This tweet from Reed Hastings, CEO of Netflix, on April 17, 2017, shortly before signing up its 100 millionth customer, has two thought tangents: One, that Netflix is not as much worried about competition from, say, YouTube or Amazon, as much as it is positive about its prospects, given the vastness of the market; two, customers are likely to dump Netflix only if a majority of its content turns bad at once, which looks less probable.

The same could have been said about gold in the noughties. The world was its oyster, with each person a prospective customer. Gold prices then had everything going in their favour. When oil rose, gold also rose, confirming its value as a hedge against inflation. When dollar fell, gold rose, confirming its value as an alternative currency.

When geopolitical tension broke out, gold rose too, confirming its value as a hedge against uncertainty. Year after year, gold prices continued to register gains, giving no signs of letting up, even though they had been going up for one full decade. The yearly gains were modest, though, if you were to compare with equities, but enough to beat inflation, and enough to give a sense of stability that other asset classes failed to deliver.

And with booming populations in China and India, the traditional affinity towards the physical gold as jewellery, coins, etc magnified its demand. Additionally, central banks’ buying gave a floor, while miners’ de-hedging and supply bottlenecks gave more momentum to upsides. In other words, with so many diverse supportive factors pushing demand higher, it was safe to say that gold knew no competitors and was poised to continue edging higher, year after year, for eternity.

And yet, gold prices did crash in September 2011 after hitting a record peak of $1,920.3 per troy ounce. Not only did it crash, gold also broke away from the decadelong trend of registering yearly gains. Why did this happen?

This story is from the {{IssueName}} edition of {{MagazineName}}.

Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.

This story is from the {{IssueName}} edition of {{MagazineName}}.

Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.

MORE STORIES FROM FORBES INDIAView all
Home-Cooked Meal Is Now Greatly Valued
Forbes India

Home-Cooked Meal Is Now Greatly Valued

The pandemic has also brought with it an improved focus on hygiene, use of technology in dining, rise of cloud kitchens and resurgence in popularity of Indian ingredients

time-read
8 mins  |
May 21, 2021
Paytm 3.0 - Reaching Near Breakeven In Two Years
Forbes India

Paytm 3.0 - Reaching Near Breakeven In Two Years

As of 2020, Vijay Shekhar Sharma’s super app for financial services had run up losses in thousands of crores. Now, as digital payments gets yet another boost courtesy Covid-19, he’s hopeful of reaching near breakeven in two years

time-read
10+ mins  |
June 4, 2021
THE PANDEMIC HAS CAUSED WOMEN GREATER LABOUR PAIN
Forbes India

THE PANDEMIC HAS CAUSED WOMEN GREATER LABOUR PAIN

Covid-19 has shown that women are more likely to face the brunt of job losses than men, and find fewer opportunities when they want to resume. That apart, several have to deal with increased hours of unpaid work at home and even domestic abuse

time-read
8 mins  |
May 21, 2021
LEADERSHIP WILL BE ABOUT SEEING THE BIGGER PICTURE
Forbes India

LEADERSHIP WILL BE ABOUT SEEING THE BIGGER PICTURE

Leaders must not only guard their teams first during a crisis, but also deal with stakeholders with respect and dignity. And apart from pursuing business goals, they should remain committed to our planet and the environment

time-read
7 mins  |
May 21, 2021
PHILANTHROPY SHOULD BE HUMBLE, BUT NOT MODEST
Forbes India

PHILANTHROPY SHOULD BE HUMBLE, BUT NOT MODEST

Apart from building a flexible and resilient framework for the future, philanthropists, civil society and the government must work in tandem so that every rupee is absorbed on the ground

time-read
9 mins  |
May 21, 2021
INTEGRATED HEALTH CARE, TECH WILL DISRUPT SECTOR
Forbes India

INTEGRATED HEALTH CARE, TECH WILL DISRUPT SECTOR

While clinical research will get a boost, having a skilled workforce and public spending on health care will be challenges in the near term

time-read
8 mins  |
May 21, 2021
DIGITALISATION WILL HELP IN VALUE CREATION
Forbes India

DIGITALISATION WILL HELP IN VALUE CREATION

As the pandemic brings technology and innovation to the core of business and daily life, the next decade will see about 150 million digital-first families in India

time-read
8 mins  |
May 21, 2021
Industry 4.0: Climate Revolution?
Forbes India

Industry 4.0: Climate Revolution?

Augmenting sustainability alongside digital capabilities is an economic, competitive and global opportunity for India’s businesses, but regulations need to reflect intent

time-read
10 mins  |
June 4, 2021
EV Dream Still Miles Away
Forbes India

EV Dream Still Miles Away

Electric vehicles have remained a buzzword in India for years. But not much has moved on ground due to high upfront costs, range anxiety and charging infrastructure

time-read
6 mins  |
June 4, 2021
Living Waters
Forbes India

Living Waters

A virus has caused us to scramble for oxygen but our chokehold on the environment is slowly strangling the very waters that breathe life into us. The virus is a timely reminder: We are merely consumers, not producers of life’s breath on this planet

time-read
4 mins  |
June 4, 2021