06 Aug '12, 2pm
COUNTDOWN: four months to mining reward drop. Last 870,000 easy bitcoin to go.
Funny trading story that I heard once. So, in India, the wedding season happens every spring, and since gold is an extremely important to Hindu culture, demand tends to go way up during that time period. The question then is, why doesn't the price spike every spring? The answer is that experienced gold traders know that demand is going to go up in the spring, and they trade accordingly. By buying early, the demand gets artificially inflated during periods where practical demand is low. Thus the total demand is almost always constant, and the price remains relatively steady around predictable demand spikes. The only time that there is real price fluctuation is when something unexpected happens. If, for example, gold demand in the spring is lower than expected, the price will drop, even if demand is much higher than other times in the year.