Reasons why the gold rates rising up

Reasons why the gold prices are up

The following are the top reasons for gold rates to be rising local and international.

• Gold prices rise when people are unsure about the government or financial markets.
• Gold is viewed as a safe haven at times of economic.
• Production cost influences its cost. When the cost of production is high, miners sell gold for more money so that they can preserve their profits. This reflects when the gold is sold in the market
• Gold is held as a hedge against inflation and currency devaluation. Currency may fluctuate but the gold price stays stable for a long time.
• Gold is bought when investors fear that the value of the currency will decline.
• When the dollar weakens, gold strengthens.
• When the banks are going through a deficit, investors buy tangible asset like gold to protect their wealth.
• As interest rates decrease, gold rates increase as the opportunity cost to hold gold is lower when compared to other investments.
• When there is a large money supply, that is when the central banks encourages loaning more money, the interest rates go down. This can however trigger inflation and that in turn will increase the price of gold.
• When the banks buy gold in great quantities as reserve, the gold prices go up as the supply of currency increases and the gold availability is scarce.
• There is a huge demand for jewellery in China and India. There is also a great demand for gold from industrial applications..
• When the economic conditions make gold more attractive, the demand increases leading to the increase in its pricing.
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