Why do gold rates continue to change?

Nowadays, gold is not only most in demand for investment purposes but also for the jewelry market, but it is also used to produce some medical products and electronic devices. There are many factors that cause the rate of change of this precious metal.

Central Bank reserves

The central bank holds in its reserve paper currencies as well as gold. Also, the World Gold Council said that recently all central banks began to buy more gold than they could sell. As all central banks diversified their monetary reserves except paper currencies, they accumulated and turned into gold, and gold prices continued to rise.

The value of the US dollar

The price of gold is mainly invested based on the value of the US dollar. This means that a strong US dollar means that the price of gold will be more controlled and will also be kept at a lower rate. Also, a weaker US dollar is likely to increase the price of gold much higher. This is mainly because most people have a tendency to trade dollars and also invest when the dollar is strong.

Global demand for jewelry

In a survey conducted in 2010, jewelry accounted for about 54% of the demand for gold, and that was about 3,812 tons. The US, China and India by volume are the largest consumers of gold for jewelry. Also consumer demand in China has reached 200 tons and this is a huge increase compared to last year. In addition, gold prices may be affected by basic supply and demand theory, as demand for consumer goods such as electronic and jewelry increases, the value of God can also increase significantly.

Protection of wealth

In times of economic uncertainty, as seen during the recession, more and more people were turning to investing in gold because of its very constant value. Gold is also often considered a safe haven for investors at uncertain times. In addition, when the actual and expected returns on bonds, real estate and stocks, interest in investing in gold increases significantly, and this is the reason for rising prices.

The recent recession has caused a gold rush in our time. Even a TV show on a similar topic gathered about 4 million viewers. This is one of the important things to remember.