Gold price – changes and impact factors

Gold Price Over The Years

Investment in trading gold has always been prevalent, the global economic situation and the price of gold has a direct link and affects the state of the dollar shares and bonds When they are less stable the rising demand for trade in gold retains its value better and is more palpable.

One example of this is the high-tech bubble in two thousand that resulted in the increased price of gold and another element that affects the price of gold is a security situation.

For example the World Trade Center bombing and the war in Iraq, created uncertainty among the world economy, which eventually led to an increase in gold prices.


There are several ways to invest in gold; the purchase of jewellery and through owning gold coins. It is important to note that holding gold can result in a loss of capital when interest in the game is a percentage and the percentage of gold doesn’t go through in terms of return on the percentage of the interest rate.

Then a loss of money occurs and alike anything that investment is not always safe. The price of gold has proven itself over the years to be a safe and profitable investment. In the last decade gold climbed up and still is rising. How long will it last?

Where Is The Gold Price Going?

Another way to invest in gold is through having shares in mining and selling gold. There are several key factors affecting the gold market and gold prices. One is the investor’s. When there is more interest in gold and its commodities than in raw materials the price of gold rises.

Investors are investing in gold to increase the flow of capital to the market. Another factor is the weakening of the dollar and this has a key role in setting gold prices in the market.

When the dollar rises gold falls and vice versa so when the dollar falls the price of gold becomes more attractive for investors. Another factor is oil prices.

Historically there was high correlation between the price of gold and the price of oil, by investing in gold protection of investors capital surge in inflation that has accompanied the times where oil has becomes more expensive.

Gold Prices

Moreover, the political tension is a factor and precious metal is considered as a very stable commodity. When there is a period of uncertainty and the global world economy is shaken by terror attacks, assassinations and bombings, the demand for gold rises dramatically.

It is real and not a stock that could one day go down to 0 per cent and have a negative impact on Securities and other goods.

Another factor that affects the gold price is a reserve ratio at central banks because the central bank holds gold as part of his reserve and purchases for sale of gold from the banks can change it’s price, since it is in large quantities and can ” dry up the market “and make demands for the gold when rising demand for price increases happen.

In 1999 a group of nine or ten banks in Europe made an agreement which restricted the sale of gold in order not to create vibrations in the market.

Investing In Gold For Profit

Under this agreement the gold sold (four hundred tons), in gold bars and banks sold less gold than they had planned.

Another factor is the hedging of risks, for almost a decade the price of gold demanded  $300 per ounce and sold future contracts to supply the gold at a later stage and when the gold price was known to have suffered enormous losses, they began buying the shares of those treaties that would then be issued to reduce the damage done and to hedge their risk.

These activities can change the price of gold, but recently this behaviour is not accepted.

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