Factors That Influence the Gold Price

Every investment asset has its price influenced by the relationship between supply and demand.

With the Gold is no different and we need to evaluate the two sides to understand the factors that influence its price:

On the supply side, the price of gold can be altered due to their extraction and production, as well as the sale held by central banks, investment banks and individuals.

The greater the supply of gold tends to be lower its price. Similarly, the lower supply (scarce), the greater will be the price of gold.

On the demand side, the price of gold is influenced primarily by the jewelery industry and investors in the metal.
Know the 4 Factors Influencing More Gold Price:

1 Economic Scenario

As discussed earlier in this paper, the Gold is a highly sought after asset in times of financial crises. Therefore, its price tends to rise enough during these periods.

2 Inflation Rates

Another factor that strongly influences the price of gold is the inflation expectation, considering that the metal is seen as protection in relation to both inflation and deflation.

The Gold tends to be sought in times of monetary instability and periods of high deficit spending.

3 Dollar Exchange Rate

The conventional and most convincing relationship between the gold price and the dollar is that a weak dollar leads to higher gold prices.

This is a trend that is already evident since the devaluation of the dollar in 2002, when the dollar reached the maximum level close of £ 4.00.

4 Interest Rates

Basic relationship for every kind of investment. The higher the interest rate tends to be lower the attractiveness of other financial assets.

This is because investment in government bonds is considered less risky investment. So if he has a high return and a lower risk than other assets, the logic is that investors prefer this type of asset.

After this part of the history of gold, statistics and price of gold going to what really matters: After all, how to invest in Gold?