Comment on Gold hits $3,500 for first time as US dollar sinks to three-year low

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calcopiritus@lemmy.world ⁨1⁩ ⁨week⁩ ago

That’s what investing is about. You have money, and want to make more money from it. What will you do?

Some people, like you, decide to invest it on producing a product, or invest on a company that produces products so they can produce more and give you a cut.

Other people, prefer to store that value in another form. Say buying gold with your dollars.

The thing is, that there’s no objective better option.

Both options have risks and rewards. And the reward is very closely related to the risk. There’s no such thing as low risk high reward. In your example, a risk would be new lab technologies developing that would make your lab equipment obsolete, which means that you just lost a lot of money. But if you manage to sell that lab equipment, you’ll probably make good money.

The thing about these news is: the reward of buying gold is decreasing (and risk increase). Why? Because its price is increasing, which means that if you buy gold today and sell it tomorrow, it’s likely that you’re gonna lose some money.

The fact that people keep buying gold even though the risk increase and rewards decrease, means that other options have an even worse risk-reward ratio. This means that people are pessimistic about the economy.

It’s not about one way of investing being better than the other. It’s about seeing people’s perception of the economy through their choice of investment.

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