8 Things That Affect Gold Prices

Before you decide to invest in gold, you need to know if the price of gold is never stable, it goes up sometimes it goes down. What actually can affect the price of gold? here are some things that can affect the price of gold home page.


Gold is often used as a standard for the value of currencies in the world. Gold prices often experience changes related to market conditions. Then what influences market conditions?

Global crisis
The increase in gold prices is often caused by the crisis that occurred in the world. This is because many people lack confidence in the government or global market conditions, which are often referred to as commodity crises. Some events that occur in the world can usually have an impact on the price of gold because gold is seen as a savior when economic or political upheaval.

Inflation
Another thing that affects the price of gold is inflation and currency devaluation. Some investors will think of buying gold if the price of their paper money goes down.

US Dollar Value
The US dollar is still the dominant reserve currency in the world and makes the US dollar the main currency in international trade. So, when the dollar strengthens, gold weakens, and vice versa.

Central Bank instability
Each country must have its central bank, for example, the European Central Bank, the Bank of Japan, or the Swiss National Bank. Irregular economic conditions make gold a promising item for investment. So, everyone trying to get gold and make paper money experiences uncertainty.

Interest rate
Gold does not have anything to do with bank interest, such as bonds or savings accounts. However, rising gold prices often lead to lower interest rates. And, when interest rates increase, the price of gold can decrease.

Jewelry and Industry
Gold is not only valuable for investment, but gold is also often used for jewelry and industry. More than half the demand for gold refers to jewelry. Generally, these requests come from China, the United States, India, and some countries with the most requests. For example, like India, gold is still a currency, wealth, and an important gift.

Besides jewelry, 12% of gold demand is used for industry. For example, it is used for electronic devices, computers, medical devices, and others.

Gold Production
Annual gold production is around 2500 metric tons, compared with 165,000 metric tons (estimated) to supply gold needs worldwide. So, of course, this will affect the gold supply. Besides, the cost of production can affect the price of gold in the world.

Supply vs Demand
Gold supply and demand for gold will certainly affect the price of gold itself. The reason is if demand increases it will also make the price of gold go up, even more so if the supply of gold begins to decrease.

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