2010 was undoubted the year when gold proved its worth more than any other commodity in the world. As china surged forward into the dimension of urbanisation basic material prices went ballistic with precious metals stealing all the limelight. It was in 2010 that the world witnessed both gold and silver hit record highs with silver reaching its highest level 3 decades. As fears of sovereign debt throughout Europe created panic among investors who sought refuge in gold, gold hit a record high of $1,423.75 at the beginning of December 2010!
The fact that silver outperformed gold in 2010 was the most surprising factor as silver jumped to levels never witnessed before at least not since the 1970s oil crisis that brought the world down on its knees. Silver rose by 70 % in 2010 securing its place as the best performing commodity of the year, similarly platinum also gained as demand from China was unceasing due to the country becoming the largest automobile market. In 2010, inflation was raging and oil prices also surged to nearly 100 dollars a barrel creating a shift in investor interest that were focused on buying up physical assets in bulk with the intention of securing shares in commodities.
As gold prices continued riding on the tip of the ‘economic uncertainty wave’ gold demand from the world’s largest gold consumers for jewellery began to wane. Especially India where demand for gold dropped by almost half which were keeping prices of gold at bay, however this fluctuation in demand for gold from the Jewellery industry was soon targeted by bigger investors – mainly governments.
The inevitable was happening, people lost confidence in paper currency and resorted to storing their wealth in the form of precious metals, mainly gold, a situation that is most likely to repeat itself in the near future.