Let's Crack the Factors that Influence Gold Prices!
Gold has attracted people throughout history due to its eye-catching beauty and luster. That's why it carries a huge history behind it. It was easily found in riverbeds and rushing streams in the older times. It is such a precious medium of trade that there is always a need to monitor its price fluctuations. Before moving forward, let's look at gold's history and background. You can trace the known history of gold to about 6000 years earlier. It was generally used for a long period solely to create idols for worship and other gold ornaments. This was until around 1500 BC when the Egyptian empire first used gold as a monetary means of trade. Egypt's Nubia region produced primarily gold at that time. It was not a pure gold coin. Those came later in the coming centuries. But, the interesting thing about gold is that it attracts people worldwide, allowing it to become a medium of exchange accepted anywhere in the world. Moreover, it needs constant monitoring to check its prices in the global markets.
Factors/ Securities that Control Gold Price Changes!
Gold is considered a solid investment globally when it comes to risk factors. That's why security institutes and commissions actively monitor the gold price fluctuations to keep the gold price from either skyrocketing or hitting the bottom. Wholesale gold trading is often done in bigger gold markets such as London, US, and Shanghai. These markets comprise over 90% of the world's gold trading. Other important markets include Dubai, India, etc. Here, UAE and Dubai are particularly famous for buying gold bullion and jewellery pieces. So, what are the key factors influencing gold prices?
1. Value of the US Dollar
Currency swings, particularly the US dollar, directly affect gold prices worldwide. The US dollar is the world's primarily used currency and has an inverse relationship with gold. A fall of the US dollar means that gold prices increase globally because the rest of the world's currencies gain value in the relative exchange rate. Investors outside the US can buy more gold, which increases gold's demand and price.
2. Demand for Gold
Gold demand can influence gold prices, and the demand varies for different types of gold. Most people buy gold jewellery. Securities increase the gold demand by imposing minimal to zero taxes on buying gold jewellery, which may raise its price or keep it the same. An example is Dubai.
Other forms include buying gold as gold exchange-traded funds. The more people invest in gold ETFs, the more the price increases. It is also used for industrial applications like electronics, healthcare, etc. Increased demand raises gold prices.
3. Global Gold Production
Gold is mined physically, and less gold is produced yearly, fearing a gold shortage by 2050. As demand outpaces supply, gold price increases. Mostly, gold stays in jewellery form in possession of its owners and is sometimes melted for reuse. But it is getting expensive over time due to conservative gold resources.
Choosing the Right Time to Buy Gold!
Are you confused about when to buy gold? Don't worry! You keep thinking, "Am I making the right decision, or should I buy it later?
· First, find in which months you can buy gold at cheap prices, as its price fluctuates. During the first few months of the year, gold prices tend to rise, as indicated by historical analysis of gold prices since 1975. The price lessens from March through August, then increases from September to November.
So, the best months are January, March, and April's start to buy gold.
· Then, check the overall global economic situation regarding gold prices. Gold is considered a haven during global economic uncertainty. The best time potentially to buy gold is when an economy is going downhill in a recession, bringing more chances of inflation.
· Know your investment goals as to when you wish to resell gold! It is crucial as it will affect your buying decision. Remember! Gold historically always gives value in the long run. So, it is better to keep it in your possession. On the contrary, if you plan to sell gold shortly after buying it, check if it is profitable.
· After making your gold-buying decision, consider what type of gold investment you wish. Whatever gold type you go for, experts say keep its portion in your investment portfolio to about 5 percent.
Wrapping Up
Buying gold requires careful consideration and proper research. The key is looking for an authentic gold jeweller to buy precious, delicate jewellery. Al Romaizan Gold & Jewellery is a trusted name in gold jewellery, with decades of expert craftsmanship and beautiful, unique designs at their fingertips. You will find stunning 18k and 21k gold jewellery collections. Their multiple UAE branches and glowing reviews speak volumes about their satisfied client base. Find delicate gold masterpieces from a trusted jeweller such as Al Romaizan Gold & Jewellery, experts of over 60 years in making lovely ornaments.
