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What type of graph is represented below?Why? The yellow metal was trading at as low as 1,051.60 an ounce last week, the cheapest price in

image text in transcribedimage text in transcribed

What type of graph is represented below?Why?

The yellow metal was trading at as low as 1,051.60 an ounce last week, the cheapest price in nearly six years.

Gold prices had not been so depressed since February 2010 - before the popular Downton Abbey show was even on television - when gold fell low, well below $ 1,045 an ounce.

Six weeks have passed in which gold has lost value consecutively.

Investors typically rush to buy gold when they are nervous, but that is not happening now. Recent events such as the stock market sell-off in late August and the Paris terror attacks have not stopped the fall of the precious metal.

"The fresh momentum of gold sales today is due to several events coming together," wrote George Gero of RBC Wealth Management. These include:

1. The economic and stock market crisis in China. China's main stock market collapsed last Friday after the government launched another offensive against the country's biggest brokerages. The Chinese elite is less likely to spend big on gold if the country's markets and economy remain unstable.

Although the Chinese government says the economy is still expanding at about 7% a year, most independent analysts believe the reality is closer to 4.5%.

2. The rising US dollar. Most of the world's gold is traded in dollars. That is not good at the moment for gold. The dollar is at its strongest point in years against most other currencies. When the dollar becomes more expensive, investors cut the price of gold.

By 2016, the dollar is expected to become even stronger: it is likely to reach a point where 1 dollar equals 1 euro, something the world has not seen in over a decade. That means gold could fall further.

3. The likely rate hike of the Federal Reserve in December. The latest blow to gold is the likely Fed interest rate hike in December. Investors widely expect the Fed to finally raise rates from their record lows of close to 0% that they have been since the aftermath of the 2008 financial crisis.When the Fed raises rates it will affect gold because gold pays no interest. There is an expectation that investors may abandon gold in search of other assets that pay higher interest.

The latest drop is another reminder of how much popularity gold has lost. It hit a record high of nearly $ 1,890 an ounce in September 2011, when Europe was in the midst of its debt crisis and the United States' credit rating was downgraded.

Most experts predict that gold will drop further. A leading gold analyst says prices could even plummet to $ 350 an ounce.

Others are not so sure that it will fall so much. Much will depend on China and whether the demand for jewelry and industrial metals picks up this Christmas season. Sales of jewelry makers like Tiffany and Signet (Jared and Kay's parent company) are not looking good this year.

"Overall, however, nothing is very optimistic," the RBC Capital Markets metals research team wrote in a note on Friday. The strength of the dollar and the Chinese economy "will prepare us for 2016 in one way or another."

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Graph C When one or more of the determinants of supply (see above) change such that the supply for that good increases, the supply curve shifts outward showing that suppliers can bring more product to market at lower prices for all possible quantities. This causes a decrease in price. Demanders will respond to the price change with a greater quantity demanded recall the Law of Demand. P S P* D Q* QGraph D TWhen one or more of the determinants of suppl'j,r (see above) change such that the supplg for that good decreases, the supply curve shifts inward showing the suppliers can bring fewer products to market at higher prices for all possible quantities. This causes an increase in price, and demanders are willing to hug,r a lesser guantigg demanded recall the Law of Demand. Graph A When one or more of the determinants of demand (see above) change such that the demand for a good increases, that shows that consumers are willing to pay more for all possible quantities of the good. The upward shift in the demand curve causes an increase in price. Suppliers respond to the higher market price by bringing a greater quantity supplied to market - recall the Law of Supply. P S A P* D D' Q* QGraph B When one or more of the determinants of demand (see above] change such that the demand for that good decreases. The demand curve reects this by shifting downward, showing the consumers are willing to pay less for all possible quantities of the good. This causes a decrease in mice. Suppliers respond to the price change by bringing a lesser guanti supplied to market an the Law of Suppl}

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