Factors Affecting Gold Prices Going Up and Down
Rancakmedia.com – You can find out the factors that affect the price of gold up and down in the articles we provide below, for that you need to understand them well.
Gold, on the other hand, is an inert rock. Whether these rumors are true or not, gold is a popular type of investment for those who want to keep their money safe.
Even if the dollar is falling in price, there are many good reasons to hold gold instead.
Gold As Investment
When gold still cheap, our parents would buy a lot of jewelry, including bracelets, necklaces, earrings, and rings, from goldsmiths.
Then, as the price of gold soared, they would resell it. It turns out that our parents used to understand the lucrative gold investment.
It is true that the price of gold will tend to rise, but it will also fall. Actually, what causes the price of gold to always fluctuate?
Causes of Gold Prices Going Up and Down
When we were children, the price of one gram of ancient gold was roughly $25,000, but now it has increased to $500,000. Sometimes it goes up a little more than 500 thousand, sometimes it drops a little below 500 thousand.
Do you know the cause of the rise and fall of gold prices? Here are several factors that cause the price of gold to move up and down. Find out too how to predict gold price in this article.
Exchange Rate Changes
Fluctuations in the value of Uncle Sam's national currency, the US dollar, can be considered the most important factor affecting the price of gold, both up and down.
The price of gold rises in response to changes in the value of the US dollar relative to the rupiah, and vice versa. As a result, gold prices rose because the value of the US dollar against the rupiah increased.
Interest rate
When the rupiah exchange rate against the dollar rises, gold will also increase in price. Conversely, when interest rates rise, the price of gold will fall.
Instead of saving gold when interest rates rise, many people take their money from the market and put it in high-interest savings accounts or certificates of money (CDs). Interest rates themselves may go up and down due to certain factors as well.
Total Supply and Demand of goods
The price of gold can move up or down depending on factors of supply and demand or demand and supply of gold.
Just like the price of other goods where the more the number of worshipers, the price will also be higher. Conversely, if fewer people are interested in buying, the price will fall.
Gold price is a good example of this. When the number of gold enthusiasts increases, the price will rise, and vice versa when gold enthusiasts decrease.
Uncontrollable Inflation Rate
Out-of-control inflation drives up the price of gold because it increases product costs and prices. This is because when inflation is strong, individuals do not want to save their money in cash, for example by investing in dollars, but they will buy gold whose prices tend to be stable and safer throughout inflation.
Because more and more gold is being chased, then returning to its initial stage when demand grows, the price of gold will rise.
another factor
In addition to the factors described above, there are many other factors that affect the fluctuation of gold prices, such as the political situation, global economic conditions and world crude oil prices. These three elements can cause the price of gold to move up or down drastically.
FAQs
Below we have summarized some frequently asked questions about gold, as follows:
When is the Right Time to Buy Gold?
You can buy gold at the beginning of the year, the beginning of the year is the best time to buy gold, namely in January, March and also early April. Or you can also make purchases in mid-June and early July.
Conclusion
In response to changes in the value of the US dollar relative to the rupiah. The price of gold can move up or down depending on factors of supply and demand or demand and supply of gold.
There are many good reasons to hold gold over dollars. Inflation drives up the price of gold because it raises product costs and prices.
Rises according to the general rate of inflation so the price will never fluctuate unlike other investments like real estate or bank accounts which can fluctuate wildly.
Thus the information about the factors that affect the price of gold fluctuate, I hope the article above can be useful and helpful for all of you.