Answers (1)

The Gold is considered as a commodity,at the same time its also considered as a money. Like any other commodity the Gold also should obide the rules of demand and supply. If the reasons for demand are genuine and compelling then the investor can be sure that the demand will sustain. As an example oil is a must for all of us (atleast for now), but even oil's demand subside when Aerican consumer uses less gasoline. Copper is animporatant commodity, but its main usage- as electrical conductor in house wiring- reduces when home construction is stopped. Comparing this, Gold as such has no reasons for compelling demand- little or no industrial use- we can all live without Gold! But in some parts of the world, mainly in Asia, Particularly in India, Gold is considered and required as esential partof life, as women adore themselves with Gold. Hence as Long as Indian Economyis strong, the Gold wont fall off esaily. On the other hand the Currencies issued by the Government all just requireprinting machines, paper and ink only. Hence to meetout the bail outs and budjet deficiets the Goverment look into printing more currencies,any thing more and abudant will loss its value!If there are Dollar , dollar every where, what is the valueof the dollar. But Gold can not be made immediately in abundance, they are available 10 grams per 1000kg of sand Hence we look for something, where we can store the wealth in a compact way (oil storage needs bog space), easily transportable or carried from one place to other place, its we , the people support the Gold!