Essay about Executive summary

Submitted By ttng2302
Words: 585
Pages: 3

Executive Summary: Now is the time to buy gold
The author forecasts that the gold prices will surge higher in near future, and he is convinced that now is the best time to buy gold again. Here are two reasons that he points out: the production of mining gold pullbacks, and Asian countries recently are accumulating gold for good reason.
Background
Gold has been used throughout history as money and has been a relative standard for currency equivalents specific to economics regions or countries, until recent time. Gold has been in a downturn for more than two years now, resulting in the lowest investor sentiment in many years. Hardcore gold bugs find no explanation in the big picture financial numbers of government deficits and money creation, which should be supportive to gold. However, author have an explanation for gold has been down, why the price is about to reverse itself, and will surge in the future. He suggests that now is the best time to invest in gold again.
Analysis
First, the author forecasts that the production of mining gold will pullback significantly in near future. Gold producers don't operate in a vacuum. If the price of their product falls by 30% over a two-year period, they've got to make some adjustments. And those adjustments, more often than not, result in lower production, delayed mine development plans, and cuts in exploration budgets. The response is industry wide, and even low-cost producers are not immune. The drop in metals prices means some mines can't operate profitably, and if the losses exceed the cost of closure, these mines will be shut down. Therefore, the supply shortage of gold can impact to the rise of gold price in future.
Second, another factor that affects the gold price surging in future is the high demand of gold from Asia. China is accumulating gold for good reason. Since 2010, China has been buying gold and not buying US Treasuries. China's plan seems to be to acquire a total of 6,000 tons of gold to put its holdings on a par with developed countries and to elevate the international appeal of the RMB. In 2013, China also imported over 1,000 tons of gold through Hong Kong alone, and it's likely that as much gold came through other