Why GOLD prices are decreasing constantly. ( PART 3)

I hope you have read the previous two articles and have some sort of understanding as to how GOLD matters in a Nation’s Economy. Now comes the interesting part follow Global News and apply common sense !! This article will sum up everything 🙂

Some of the news which you should be aware of with regards to GOLD :
1: Germany’s Central bank ( BUNDESBANK ) has requested its GOLD RESERVES be brought back to its country. GOLD RESERVES of about 1500 tonnes will be brought back to Germany from US in 5 years at around 300 tonnes per year.
2: Cyprus wants to sell its GOLD RESERVES of about 400 million EUROS 10.36 tonnes of GOLD RESERVES ) to finance part of its bailout due to recent economic slump.

Why GOLD prices are decreasing constantly. ( PART 1)

It is very important to understand why actually GOLD matters in a NATIONS ECONOMY and what GOLD RESERVES are and how it affects value of a NATIONS currency in International trade.

GOLD RESERVE ( refer Wikipedia for more details ) : basically means GOLD held by the central bank ( in INDIA it is Reserve Bank of India : RBI ) intended as a store of value and as a guarantee to redeem promises to pay depositors, note holders ( paper money ) or trading peers or to secure a currency.

In short : Every country has been following a tradition of reserving certain amount of GOLD in order to print Currency Notes ( A Nation cannot simply print currency notes just because it has paper and printer 😛 if it does Liquidity in the market increases and value of the Currency falls down and the ultimate effect you all can guess)