Key elements that affect the price of gold include demand, supply, and the way investors judge and behave. This may sound easy, but the way these factors interact is not always straightforward. Hence, gold prices can also be influenced by other factors other than these three. Other factors include interest rates and global inflation.
Back in 4,500 B.C.E., gold was discovered alongside remains in gravesites. For centuries, gold has been a desirable asset. It has always been a symbol of influence and wealth. This fact clearly reflects gold’s appeal and consistency over time. Gold was used to make ornaments, jewelry, and early forms of currency.
The price of gold is relative to the global economic situation. When the global economy is in a poor state, the price of gold increases. Investors purchase gold to secure their assets and have something substantial to shield them from economic crises and inflation.
In August 2020, the gold market witnessed its biggest drop in the last seven years. With the number of Coronavirus cases reaching an all-time high in the USA, major businesses were forced to shut down and traders started panic-selling their stocks.
There are a few misconceptions when it comes to the gold lending market and central banks’ role in it. This is because the gold lending markets are over-the-counter (OTC) markets where transactions between two parties are direct and a broker or central exchange entity is not present to oversee the deals made. Therefore, the process of gold leasing is generally obscure.
Gold’s value as a strategic asset has been on the incline in the past few years, as central banks increase their gold holdings. Many central bankers are still unsure about managing their gold holdings due to a lack of transparency in terms of pricing. It doesn’t help that the gold lending market is primarily an over-the-counter (OTC) market, which raises transparency concerns, partly because details about starting price and intra-round prices are not revealed.
Gold prices have hit record highs in 2020 as investors scurry towards it amidst negative-yielding debt. Meanwhile, gold mining companies have been ramping up production to keep up the pace with the growing demand. JPMorgan and Chase Bank lifted their estimates on the outlook for gold to $2000 an ounce. The point is, 2020 is looking great for the bullion.
Perhaps you’re buying new jewelry and don’t want to get ripped off. Maybe you want to sell your old jewelry and want an idea of the prices you’ll get on the market. In all these cases, what you need is to have your jewelry appraised by an expert. Receiving an official appraisal will qualify you to receive financial reimbursements for your jewelry from your insurance company.