Speculative Demand

Speculative demand refers to the desire to hold cash or assets not for immediate use but in anticipation of future price changes. Investors hold these assets expecting that their value will increase, allowing them to sell at a profit later. Speculative demand is common in markets where prices are volatile, and investors look to capitalize on short-term fluctuations.

Example

An investor might hold onto gold during periods of economic uncertainty, speculating that its price will rise as other assets, like stocks, decline.