Today, most physical gold is bought and sold in over-the-counter trade, that is, through various companies or traders in the sector rather than in a centralized market, and its price is constantly fluctuating. This variation is known as the “spot price” of gold.
Control the evolution of the price of gold
You can see the prices by selecting the metal’s weight according to grain, kilograms, or ounces. That is, you can see the price of the metal according to the weight that interests you the most, and throughout the period of time, you decide, and in this way, you can make an informed decision when making your investment. The price of gold per 1 Gram changes every day.
What can influence the price of gold?
Like most goods, the price of gold also depends on the laws of supply and demand. Currently, its demand is very high because gold is used not only in the fields of jewelry and investment, but it is also a material used in the manufacture of electronic and medical elements. Despite this demand, the price of gold continues to fluctuate and does so according to the following factors, among others:
Interest rates
Gold does not pay interest, and as a result, you will stop earning the interest that you could have earned by investing in monetary assets. This is known as “opportunity cost,” which is a simplified way that means that interest rates and the price of gold are not always synchronized. Although, in most cases, they rise and fall together, they can also move in opposite directions.
The stock market
The price of gold tends to move in the opposite direction to that of the stock market, and that is its behaviour, almost 50% of the time. If you compare the annual interaction between the price of gold and the S&P 500 Index over the past five decades, the average is zero. This means that gold can help build a more stable investment portfolio that is not based solely on stocks and shares so that investors can minimize the risk that all their investments go up and down at the same time.
The price of the US dollar
The US dollar is used as a reference point when setting natural resources, and gold is no exception. While on numerous occasions, about 60% of the time, it has happened that a weak dollar has caused a rise in the price of gold, this is not always the case and, in recent years, the value of gold and the price of the dollar have evolved evenly.
How to invest in gold
As much as we are sure that gold is an investment that strengthens any investment portfolio, we are also aware that investing in gold is a matter that should not be taken lightly. If you are interested in including investment in gold or other precious metals in your investment portfolio, try with only registered companies. Regarding up and down of rates one can get help from online portals.
