Factors that Influence Gold Prices on the Market

Many investors lost millions during the recent financial crisis, especially those in real estate and the stock market. These portfolios have always been popular with investors despite the obvious risks and potential for failure. The global economic crisis opened people’s eyes to a new form of investment. Throughout the whole crisis, gold prices continued rising steadily instead of falling like other commodities. Investors who noticed this quickly rushed to capitalize on it and secured their investments in gold. This investment rush only served to further raise the gold prices higher. The gold market has now become one of the most lucrative investments in the market.

The prices of gold in the market are influenced and determined by several factors. The balance between supply and demand is very crucial in this case. Those who want to invest in gold must have a proper understanding of all the dynamics involved in the control of gold prices. One requires a credible and reliable source of information on the current prices of gold and how they keep changing on a daily basis. One also needs to know where to purchase pure gold as these have more value in the market. A good understanding of how the market is influenced by all the various factors is crucial.

Gold mining represents the largest source of gold supply in the market. Mining is tightly controlled to avoid flooding the market with excess gold. This would be detrimental to the prices of gold which are sure to plummet. Part of the reason why gold is expensive is because it is rare. Old mines are usually closed down whenever new mines are opened up so that the supply of gold in the market remains steady. The high gold prices are crucial also to the mining companies and countries producing gold.

Scrapping and recycling of gold also represents a significant source of supply of gold in the market. This involves the melting of old items that were made of gold and then using the gold for other purposes. Central banks all over the world all hold large reserves of gold mainly in the form of gold bars or ingots. Gold is an attractive medium of exchange for international trade and so every country wants to stock up on large quantities. The jewelry industry represents the biggest demand for gold, taking about two-thirds of the entire world’s gold supply. 10% of the gold available is used for industrial purposes.

Those who want to invest in gold must take time to learn about trade first. One should know where to buy pure gold which has a higher value. Nowadays it is possible to buy gold online from various companies that provide such services. One can invest in gold by buying gold coins, gold bars or bullions. It is possible to become a gold investor with very little money to start with. One can start by purchasing the lesser values and slowly building up on the investment whenever they get more money to buy gold.

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  1. Gold and silver from the dead turn often into lead. – R. Buckminster Fuller

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