Gold Prices

Gold, a chemical element, is also called a yellow metal which is soft, malleable, ductile and dense. Its luster and bright yellow color is not tempered with the passage of time, and by the action of water and air. It is a valuable, precious metal which is used for jewelry, coinage, and other arts since time immemorial. In addition to its extensive monetary as well as symbolic functions; it has wide practical utilities in electronics, dentistry, medicine, food and drink, industries, electric wiring, and gold leafing. It has been extensively used as money all over the world, and is stored as wealth in forms of bars, gold bullion coins, and other units of certain weight and purity level. It is accumulated to serve as a hedge against economic fluctuations and disruptions, and inflation. That is why; gold price is a subject for discussion in every household of the world. There is a clamoring to have the update about gold price, and numerous mediums prominently display gold prices in their columns and programs. Many people strive to get update of the changing gold prices every passing moment. Current gold price refers to the rate of exchange of the precious metal with various monetary currencies of the world.
The gold prices are also amenable to the concept of demand and supply, but do not conform to the trends of other commodities. In 2008-09, the global economy passed through recession, and all metal prices fell sharply, but gold prices rose during the period by around 6%. Out of the world supply of 3500 tons of gold, mining account for 2500 tons, 1000 tons from Central Bank sales. Around 2000 tons of gold are used for jewelry and the rest for retail investors. It is the peculiarity that gold demand for jewelry can be converted to the supply side easily. It implies that gold being a renewable source, and not amenable to degradation in quality can decidedly be recycled which may facilitate reduction in demand for mined gold. Thus jewelry and gold reserves in Central Banks are capable of entering into supply side aspect in the gold market.
Talking about trends of gold prices for over a century now, gold prices hardly fluctuated, and it remained constant at around $20 per ounce between 1833 and 1933. After 1934 when President Roosevelt fixed price of gold, it increased to $35 per ounce which remained almost constant up to 1967 when price of gold was decontrolled. Gold then being traded since 1967, the price of gold fluctuated widely. It was in January 1980 that gold prices took a big jump, and reached $300, and also dipped considerably in March. The largest jump was in March 2008 when prices rose by $1011 per ounce. There have been wide fluctuations taking place in prices of gold ever since then due to it being market driven.
The two factors responsible for fluctuations in gold price are crashing of global financial markets and recession in global economy as at this point of time, investors lose confidence in the market. Long term reason includes mainly decrease in the mine production.

5 Factors That Can Drive The Current Gold Price Even Higher

Right now gold prices are high, but experts predict that the price may continue to rise. There are many factors that can drive up the gold price on the market, and the factors listed below are just a few of these.

1. US Policy- The US policies in place will play a role in the cost that gold has on the market. If the monetary policies of the United States causes investors to become concerned that inflation or deflation is very possible then gold may be invested in to hedge against this financial unknown. If too many investors turn to gold then this will drive up the demand for the metal, which also drives up the market price due to the increased demand.

2. Actions Taken By The US Government- Another factor that is relevant to the gold current price is the US Government actions taken. New Laws and regulations that affect the stock market and other investment areas may cause investors to choose gold instead. This precious metal is fairly simple and is not normally subject to new market rules or numerous regulation changes.

3. Global Economic Considerations- The global economy is a big factor as far as the price of gold is concerned. When the global economy slows down then investors start to become more cautious, and security may take precedence over higher returns when it comes to the available investment capital. Currency devaluation can be a fear that investors around the world share.

4. Disruptions In The Supply Of Gold To The Market- If the amount of gold that is available to the market drops because of a supply disruption then gold prices could shoot up, and this increase could be substantial. Supply disruptions can occur because of many reasons. Labor shortages, strikes, operational problems at one or more mines, natural disasters, and other possible causes could leave gold in short supply and a higher price.

5. An Increase In Global Manufacturing Levels- The gold current price right now reflects the manufacturing base that is present across the globe. As the manufacturing levels increase in each country gold will be in higher demand for these manufacturing activities. This means that less of this metal may be available for investors, and this could mean higher gold prices in the futures. It is doubtful that many countries will scale back manufacturing once this base has been developed, and the rate of gold use in this sector will increase over time instead of going down.

Gold Breaks the $1700 Resistance Point