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In this context, if anyone around the world invested in gold without any desire or intention to carry out fast-paced speculative operations, he would be able to recover about 95% of the amount of money he invested in the first year. And if he intended to speculate and trade, and he had the sources of information and the analytical ability to read the numbers and match them with the indicators and the price path of this metal, he would have had an opportunity to achieve some profits within the period of August 7, 2021 – July 3, 2022. These profits were not deducted from the costs of operations, commissions, nor inflation. Which ate the purchasing power of the invested money. In this sense, gold did not provide protection from price inflation. This metal, like all commodities that can be considered reference and offered for trading on international stock exchanges, has a price that is affected by current developments, and is also subject to rapid fluctuations.
Nevertheless, gold has a stronger reputation than it does. It is the metal on which the dollar was priced before the seventies, and in exchange for this metal, all currencies around the world were fixed at that stage as well. But after that, gold broke away from the dollar to link the latter to oil. As for today, only the “folklore” of the historical record remains; As it does not preserve value more than the dollar itself, that is, the preservation of wealth is not through owning gold, but it can be considered as a tool used to diversify the risks of preserving wealth. And retaining gold means that it is difficult to obtain liquidity, meaning that it is better to invest in gold in the long term, and not in the medium or short term. Similarly, investing in US Treasuries may be safer than gold due to its intrinsic value and ease of liquidation. As for the long-term, in the first ten years (2002 – 2011), the price of an ounce of gold jumped from $349 to $1,837, an increase of 426%. In the last ten years (2011 – until July 27, 2022), the price of gold only increased by 6.5%.
In fact, all this rush for gold is not understood, especially in Lebanon where it is sold for cash dollars. The problem of storing dollars is similar to the problem of storing gold, and both are subject to theft, and dollars have an advantage if the holder wishes to obtain immediate liquidity, while gold has an advantage in the event of long-term savings without any guarantee of achieving large future profits or covering price inflation. All this talk is also related to less influential elements in the price; Among the most prominent are the quality, caliber and shape of gold. If it is bullion, it is different from manufactured gold, which loses some of its value when it is resold.