Introduction
It doesn’t take too much thinking for a lot of people after looking at gold prices to decide to just convert their money into gold.
One of many stories about that fifty-year-old employee, who is telling his friends and neighbors that he has made up his mind. Since his savings in the bank (which he is already not able to take all) also the money in his possession is decreasing in value day after day, while gold is rising like crazy. So, he will convert it into gold, so that it maintains its value and he is encouraging his entourage to do the same.
Can we blame him?
This guy does not represent a special case in his turn to gold to invest in, as the precious metal has become an option for safe investment among large segments of Lebanese people same as for Egyptians over the past months (as I am witnessing this myself).
Now, in common sense, we find that what is happening in the markets in terms of price fluctuation and instability is due to a large trading movement between supply and selling movement to reap profits and benefit from the significant rise in gold prices. Noting that at a certain point, the rapid change in prices led to confusion in some stores, which caused sales to be suspended for a few times to determine the buying and selling prices. I’ve also witnessed that many times since 2019 when it happened in our local currency and now it happened with gold. But it won’t happen with Cryptocurrency.
So one of the reasons for the rise in the price of gold due to the theory of supply and demand (not to mention the political interference now), since here we are going through crises because of the war on our borders and even from Before to be more specific it’s since 2019, and the Russian-Ukrainian war, and other, so there is one crisis after another, which caused a decline in the purchasing value of the local currency, and with the lack of clarity in the vision of the events surrounding, this led many sectors of the community to think about preserving the value of their savings, and those who do not They only find gold as a haven, which increases the demand for it, and thus its price increases.
Logically the high demand movement is linked to investors’ hedging against upcoming rises that global markets are expected to witness during the first quarter of this year, such as a reading of global market indicators on the one hand, and seasonal demand movement in local markets on the other hand. It is expected that the price of gold will not decrease at the beginning of 2024, except with the stability of the situation in the region and behind the borders of the state. Then, with a feeling of stability, citizens will sell the gold they possess, and thus the supply will increase, which will reduce its price.
Conclusion
The "gold craze" in Lebanon is a desperate reaction to economic instability and a lack of trust in traditional financial institutions.
Overall, the population seeks protection from economic uncertainty by holding on to a tangible asset like gold, highlighting the desperation and lack of faith in other solutions.
Posted Using InLeo Alpha