Why Do Gold Rates Keep on Changing?

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Nowadays, gold is not only the most sought-after product for investment purposes and also for the jewelery market, but it is also used for the manufacture of certain medical devices and electronic devices. Many factors determine the rate change of this precious metal.

The reserves of the central bank

The central bank holds paper currencies as well as gold in its reserves. In addition, the World Council of Gold said that all central banks had recently started buying more gold than they could sell. With all central banks diversifying their currency reserves away from paper money, accumulated and converted into gold, gold prices continued to rise.

The value of the US dollar

The price of gold is mainly invested according to the value of the US dollar. This means that a strong US dollar means that the price of gold will be better controlled and maintained at a lower rate. In addition, the weakness of the US dollar should lead to a significant rise in the price of gold. This is mainly due to the fact that most people tend to trade in dollars and also invest when the dollar is strong.

Global demand for jewelry

At a survey conducted in 2010, jewelry accounted for about 54% of gold demand, for a total of about 3,812 tonnes. The United States, China and India are the biggest consumers of gold for jewelry in terms of volume. In addition, consumer demand in China has reached 200 tons, which represents a considerable increase over last year. The basic theory of supply and demand can also affect the price of gold because the demand for consumer goods such as electronics and jewelry increases, the cost of God can also increase considerably.

Protection of wealth

In this time of economic uncertainty, as has been observed in times of recession, more and more people have turned to investing in gold because of its very durable value. Gold is also often considered a safe haven for investors in times of uncertainty. In addition, when real and expected yields of bonds, real estate and equities, interest for investment in gold increases significantly, which explains the sharp rise in its price.

The recent recession has caused a rush to gold in modern times. Even a TV show on this similar topic had attracted about 4 million viewers. This is one of the important things to remember.


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