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“3” Factors That Affect Gold Prices

A bunch of gold coins and bars

Gold has been regarded as a valued asset since ancient times. Ancient Egyptians used it as ornaments to symbolize their dominance in Egypt around 5000 BCE, while pirates competed to steal precious metals and other wealth from fleets. Gold’s luster hasn’t faded, and its price levels are still relatively substantial.

Analysts predict that the United States will enter another economic downturn in the coming years. If you don’t plan ahead, you can find yourself dealing with inflationary pressures, which can bring a slew of problems.

Are you searching for smart ways to invest your earnings? According to most investors, acquiring precious metals, especially gold, is a promising investment. However, before investing in gold, it’s essential to understand the factors that affect its prices. Take a look at this guide to understand what influences the prices of gold in the modern world.

1. Demand And Supply

When demand for precious metal rises, it affects its cost. Gold is a metal that is always in high demand, which makes it a better investment option compared to other precious metals.

Aside from the global recession, gold has consistently proven to be the ideal investment during recessions. Throughout the 2000s downturn, gold values soared due to various events that shook the US economy. By observing the past events, it’s believed to be best to keep gold investments during economic instability. By tracing previous downturns, it’s clear that gold investments can be fruitful even in case of major inflation.

2. Inflation

Most people choose to invest in gold as its prices react to hyperinflation. When inflation goes up, the price of a currency falls. As a result, many people choose to invest their wealth in gold. Gold functions as a hedging measure against economic recession when it skyrockets.

Ironically, gold and the US currency have risen in line with global trends during the last five years. Several socioeconomic reasons, like rising international debt ratios and the repercussions of the China-USA economic spat, have contributed to gold price inflation this year.

3. Market Consideration

Gold prices have experienced highs and lows during the last ten years. Gold was valued at $1,360 at the beginning of 2011, and it kept growing until the end of 2012, when it reached $1,745. The gold price plunged until November 2015, when it reached $1,069. Its price began to grow after that, reaching $1,866 over the next seven years.

A bunch of gold bars placed on a table

You can understand the ups and downs of metal prices by concentrating on the international market and judgments taken by the executive branch and monetary authorities. These judgments have a direct effect on gold prices.

Get In Touch With One Of The Most Trustworthy Precious Metal Investment Dealers

If you’re looking to invest in gold to make money, Orion Metal Exchange offers precious metal products for investment. We have been in the metal investment industry for 50 years and will support you every step of the way.

Whether you’re buying a gold coin online or investing in any other metal, our team will provide you with up-to-date information about market conditions that would benefit your investment and help you find the best investment plans. Contact us today to learn more about our metal products and other services.

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