4 Factors Affecting Gold Prices

Jakarta, Inako

With the increase in prices of basic goods each year, relying on savings alone is no longer enough. Investing in gold is one way to make profits besides saving. However, the volatile nature of gold prices  makes it difficult for traders . The possibility of rising or falling gold prices should always be anticipated. If you are not observant about the situation, you can still lose. When investing in gold, it’s not just about profit and risk management, but more importantly the psychology aspects. So, what factors influence the price of gold going up or down?

The US Dollar

Generally gold and the US currency have an inverse relationship. Which means that when US dollar is getting stronger then the price of gold tend to fall and vice versa. Make sure to always observe US dollar movement so you can make the right decision when buying or selling gold.

World Gold Production

When gold production decreases, the  demand for gold rises, which causes the rise in gold price. On the other hand, Gold production rises, demand for gold falls, and finally gold prices would fall. In this case, gold demand increases due to the gold monopoly by banks in Europe and America.

Inflation

When inflation occurs, people tend to invest in storing gold rather than saving money. Then the demand for gold would rise which creates the rise in gold price

Political Issues, War and World Recession Conditions

Gold has a negative  nature where conditions worsen but gold price is increasing. In the event of a crisis or recession, gold is increasing