What Factors Affect the Price of Gold?

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What Factors Affect the Price of Gold?

Сообщение#1 » 20 сен 2022, 14:05

This question preoccupies the mind of everyone who is directly or indirectly related to the investment in gold, in some or the other form. Gold has always occupied a prominent position in determining the global economy. The price of gold is considered as a major indicator of the status of global economy.

There are basically five main factors that affect the price of gold. They are:
1. Value of US dollar
2. Demand for jewellery by the Asian and Chinese markets
3. Central Banks Reserves
4. Production of gold
5. Rise in investments in gold

The foremost factor that governs the price of gold is the value of US Dollar. A stronger US dollar will keep the price of gold controlled and low. A weak dollar will set the price of gold spiralling to a very high price. US economy plays a major role in shaping the macroeconomics of the world. When the dollar is strong, people invest, buy and trade in dollars.

However, in recent times, the US economy has suffered a lot. Dollar has not [url]22ct gold price today[/urlhttps://www.a1jewellers.com/] remained as powerful and promising as ever; this is the reason why people and nations start investing and hoarding in bullion. The high gold reserves strengthen the national economies and act as a hedge against inflation.

Since the past few decades, whenever people sense that the dollar is showing weak performance in the world and stock market, they start investing in gold-funds or gold coins. Bullion is bound to give them more value for their money, and this increases the demand in gold. As with all other commodities, gold is also dependent upon the demand and supply formula.



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