Since Arena Net is pretty tight lipped about the currency exchange, it’s hard to tell how much gold is entering or leaving the market. Earlier tonight I purchased ~1000g in gems http://www.gw2spidy.com/gem . I should have done this sooner but after reading the patch notes I felt that I had too much of my net worth tied up in gold. When I made my purchase, the price spiked up as I would have expected. However, I did not expect it to almost instantaneously return to the same level I purchased at. It’s entirely possible that someone was refreshing the exchange, waiting for such a spike to convert gems to gold. However, I think it more likely that Arena does not want the price increasing too fast, and potentially discouraging other people from converting gold to gems, which leads to the main reason of my post.
If Arena is more actively involved in the currency exchange than they have led us to believe, then we have no insight to how much gold is leaving the economy. This means we will have little warning of a market downturn and as long as Arena keeps us in the dark, we’ll have to rely on our reasoning, and based on that I think we face a significant chance of deflation in the market.
https://forum-en.gw2archive.eu/forum/info/news/Game-Update-Notes-December-14-2012/first#post999247
Reasons for Deflation
1) More gold will be converted to gems than gems converted to gold.
A. In my opinion gold is still too expense in terms of dollars. At the current rate, it would still cost you 75$ to buy Commander and 80$ to buy a guild bank with 250 slots. I think we’ll see our first hard floor around $50 for Commander and seriously doubt Commander will ever cost less that $20.
B. Arena Net is marketing gems to a new group of people, traders. Previously, the Gem store offered very little that I cared about except bag space and character slots. However, now they have added items that I actually have some interest in, made more of the drops from chests sell-able, and added “gold drops” for the gamblers. I’m pretty risk adverse but If you have pockets that are deep enough, you could theoretical figure out the break-even point on BLC.
2) Arena has heard the cry of their people and decided increase the supply of some T6 items that drop from containers. Since they’ve caved on this, they may increase supply on other items that they deem are over priced.
All this being said, I think it is a dangerous time to be trading over night. I’m not saying don’t do it, it’s just that the risk of a loss significantly increases as you enter a bull market. Instead of looking at the average low spikes on spidy, you’ll be trying to predict the new low spike. If we do enter a deflation period, gold is a good place to hold your wealth. However, if you care about the gem store, I’d recommend you hold some of your wealth in gems as well because I do not anticipate this ratio to improve. You also might want to consider holding low valued tier 1&2 raw crafting materials while staying away from any of the more expense tiers. Of course, I could be wrong about this but I’ve already taken my own advice. I’m holding gold, gems, and low valued crafting materials, and a few long term value based investments. If you can keep yourself liquid, you’ll be ready to take advantage of very low priced items when the market does swing back.
(edited by Logun.5360)