What Factors Affect the Price of Gold?

The question to everyone who is directly or indirectly related to investing in gold or some other form, the mind preoccupies. Gold always has a leading position in determining the global economy. The price of gold as global economic situation is considered a leading indicator.

There are basically five main factors that affect the price of gold. They are:
1. U.S. dollar value
2. Jewellery demand from the Asian and Chinese markets
3. Central bank reserves
4. Gold
5. Investment in gold up

The most important factors that control the price of gold is U.S. dollar. Under control and keep a strong U.S. dollar gold price. A weak dollar is a very high price will be set up for the rising price of gold. U.S. economy plays a major role in shaping the world's macroeconomics. When the dollar is strong, people are investing, buying and trading in dollars.

However, in recent times the U.S. economy has gone through a lot. Dollar powerful and no longer as promising as ever, this is why people and nations to invest in bullion and start hoarding. High gold reserves to strengthen national economies and act as a hedge against inflation.

Since the last few decades, people also means when the dollar is showing poor performance in the world and the stock market, they start investing in gold ETFs or gold coins. Bullion for more value for their money is bound to give, and it increases demand for gold. As with all other commodities, gold is also dependent on supply and demand formula.

China and India the biggest buyer of bullion to the market for your jewelry. In 2004, for the first time in the history of Chinese citizens were given ownership of IGNOT. This is a very high demand for bullion, which later influenced the price of bullion has begun worldwide.

Central banks as a hedge against inflation to IGNOT stores. Other central banks' monetary policies also affect the price of gold. Low interest rates discourage investment in the paper money, they turn to golden metal in hopes of better returns. If the central banks give high interest rates, chances IGNOT price will fall.

The rising cost of production of gold mining, gold strikes by miners, political positions, the sharp rise in oil prices after the Iraq war, and terrorist attacks because of the worsening decline in gold mining output was recorded for the last 5 years. The world's population is growing and so is seeking to invest in bullion. Humans have always believed in investing in bullion for centuries. So, gold prices are affected by man's natural desire pile of gold.




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