The association of mankind and gold is very old. In fact, after terracotta, shells etc., gold can be safely declared as the next oldest ornament making metal for both men and women. Gold is not just a metal for adorning oneself. Instead, it is also a way to safeguard your interests and consolidate your position in the society. In short, Gold is an excellent investment. If a person glances at the gold price history, one can notice that it has always appreciated. Depreciation in the price of gold has seldom occurred. Even if it has, it has been temporary. With every passing season, the gold price is gone strength to strength to consolidate its position as a viable and the most brilliant form of investment.
A gold price chart is the best way to know the price of gold on a daily basis. Based on this chart, the ups and downs in the gold market are decided and investors trade in the said form of asset. Gold is one asset which neither loses its sheen and luster nor its value. The metal is used to act against economic instability and political emergencies. In the following lines, we will try to understand the diverse factors which affect the gold price and decide the trend in the market.
Factors affecting gold prices:
The main varieties of gold are 14 karat, 18 karat, 22 karat and 24 karat gold. The 18k gold price per gram is different from 24 karat. The 18k gold contains more impurities than that in 24 karats. But only 18 karat is used to make diamond jewelry in gold as the impurities make it very strong to hold diamonds in its grip. Gold prices vary as it can be obtained in two main forms and they are either in the form of jewelry which is semi adulterated to make it commercially viable or else in the form of bars, coins, Exchange-traded products (ETPs), certificates, gold accounts, shares in gold mining companies, derivatives and CFDs which are termed as investment vehicles. Gold jewelry is the commercially viable form since it is mixed with trace amounts of silver, manganese, copper etc. to make it strong.
The current gold price per ounce is dependent on the following factors:
- The gold pricing is also dependent on the current state of economy of the country. Due to economic downturn, sometimes people are of the opinion that the banks in which they have put in their money will go bankrupt. In such a scenario, the people tend to withdraw money from the banks. Due to this sudden trend of customers withdrawing money from the bank, it actually stands at a risk of bankruptcy. Therefore, to stabilize itself, the demand of gold reserves rises as they are an alternative to retention money. This affects the gold price per ounce and they tend to rise.
- Demand and supply: The demand of gold vis-a-vis the supply of it determines the current gold price in the international market. It has been seen that the gap between the two is one of the major elements contributing to the price rise of the metal. According to the laws of economic, the higher the difference the higher goes the price. This discrepancy in the demand of this ‘yellow metal’ is the cause of high gold price per oz. No matter how much ever is the demand of the gold, the supply is always lesser than that. Therefore, the prices are increasing day by day. Moreover, the depleting reserves of gold are another reason for the rise in gold prices per gram.
- Low rate of interest: The low rate of interest is also at times a major contributor to the increase in the gold price per gram kind of situation. During the times of risk and economic inflation, it has been noticed that the returns obtained from other avenues of investment such as securities, bonds, equities and even real estate are not enough to fill the gap. At such times, the gold price per gram increases as gold is an alternative and an extremely powerful alternative source of investment.
These factors which affect the gold price keep changing on a daily basis. The government of a country always has enough gold reserves to save itself from any kind of major problems with regards to the economy or inflation. Political turmoil or economic upheaval, natural calamity or the slightest indication of a war is enough to send the gold price chart soaring high. Depending on the market, current gold prices, the investors take a smart decision of investing their hard-earned finances to buy shares in a gold company or buy gold from the bank.
The history of gold being an attractive commodity is very old but the most intriguing fact about it is that, despite the continuous hike in the prices, the rate of gold consumption too is increasing. The gold price per gram has raised a lot but the mentality of wearing or even accumulating more gold has not diminished with time and the market situation. Gold is one product which has many uses including making jewelry, exchanging in lieu of cash reserves and stabilization of the country’s economy. Since the gold market is open to speculation, the gold price is very volatile in nature and the trends are difficult to predict. In fact, sometimes even industry experts and gold market specialists too turn out to be completely wrong in their analysis and predictions.
However, the trading is indeed a very profitable business and some of the people make a living out of it sitting at home. Based on the knowledge of 24k gold price and the market trend, the investors or buyers invest in the related commodity. The above-mentioned factors are the main and important ones which affect the gold price per gram on the global level. Based on the current reserves of gold and the trading position of a country in the international market, the price of gold is determined in the gold exchange and the daily rate is fixed.