Gold Price Rise

Key Factors Contributing To The Gold Price Rise

Today, gold prices are on an upward track and the price of 1 oz of gold is $ 1,840. In the near future it may come at the level of $ 2,000. This is due to geopolitical concerns, high inflation and rising fears of a recession. We can anticipate a gold price of $ 2,000 an ounce in the next two or three years.

How is gold price determined?

Dependency on the price of gold is another factors affecting gold prices. The price of a metal can rise or fall due to the global demand for it. If people are interested in investing in gold for a long time, then the prices will be higher than others.

  • Central Bank Reserves:

The demand for gold surging as central banks continue to hold gold as part of their reserve holdings. The demand is high, creating a positive feedback movement that has created the current rally in the price of gold.

  • US Dollar Rate:

The price of gold has been inversely proportional to US Dollars. Thus, when Dollar rates fall, gold rates rise and vice versa. The main reason is that investors park their funds on gold to hedge their investment against falling Dollar rates in the currency markets. Thus, gold is a hedge against inflation and wider market fluctuations.

  • Demand for gold as jewelry and in industrial uses:

In 2019, a major demand for gold is in the form of jewelry. China, the US and India are the three leading consumers of gold jewelry. There is also a sizable demand for gold for manufacturing medical devices and precision electronics. This makes it imperative for us to know about its supply and rate, in order to arrive at an informed decision when buying or selling gold. The supply of gold outstrips demand throughout most of the year as investors lock up their money by buying bullion bars.

  • Investment demand:

Gold is an important element in the current economic and financial system. Gold bullion bars are bought as an investment and in trade by both individuals and businesses. The best place to buy gold bars is with authorized dealers, as they will have genuine products from reputed international mints and banks. Generally, banks, financial institutions, and high-net-worth buy gold bullion in the form of bars.

  • Production of gold:

Gold is the most common type of jewelry used. The demand for gold has increased because of its beauty and scarcity. Most of the gold that comes from mines stays in the country and hence it affects supply and demand. The prices of gold vary from country to country. Gold mining boosts the economy of a country, as most miners are paid well by digging up the gold ore they need.

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