If you are one of the people who are looking to add gold in their investment portfolio, it is highly advisable that you have some basic knowledge on the behaviour of gold rates. For thousands of years, gold has been desirable to people due to its universal currency status. It is often used as a symbol of wealth and abundance, making it one of the wisest investment strategies one could ever make.
Due to today’s poor global economic status, a lot of people turned to gold bullion investment as protection from the effects of economic crisis. And while buying gold bullions from a trustworthy dealer like the City Gold Bullion is a great form of investment strategy, newbie investors should be aware about the factors that affect the rise and fall of gold prices.
- Supply and demand
Just like any other commodities, gold bullion can experience a great of deal of price movement. The increased in market demand with low gold supply can definitely catapult the prices of gold. - Global economic crisis
Any negative events happening around the world can have an impact on the behaviour of gold prices. The lack of confidence in the government or financial market can spark crisis commodity. - Inflation
Inflation is another factor that affects the movement of gold prices in the market. Inflation refers to the economic growth and expansion. So when a country is experiencing inflation, the Federal Reserve is like to increase the monetary supply, which decreases the value of existing monetary note in circulation. This often makes it costly for a person to purchase assets, such as gold. - Gold production
It has been widely reported that only an approximate of 2,500 metric tonnes of gold is produced every year, which is far too less than the estimated 165,000 metric tonnes in the world’s gold supply. The production cost can also play an important role in the cost of gold in the world market. When the production cost is high, miners are likely to sell gold at an expensive price to preserve their profits.
Although it gold bullion investment may sound complicated, but with the help of a credible and established gold bullion retail specialist, you will know how to kick start your investment plans. With the City Gold Service, you ensure that we focus to make your investment a huge success.
