Investing in gold seems to be at the forefront of many people’s minds these days. With the economy continuing to seem less-than-stable, a common thought when it comes to a potential “safety net” tends to be investing in precious metals. After all, the worth of gold has proven to stand the test of time. However, it is important to note that the value of your investment is only worth as much as the standing rate. So how do you discover that?
Well, the formula to determining current rates is one that can’t be pinned down exactly, mainly because rates are consistently changing, and not just on a daily or hourly basis, but almost minute-to-minute. That may sound scary, however once you learn and understand the major factors that influence the current rate of gold, you will better understand the best times to buy and sell, and thus be able to maximize the lucrativeness of your investment.
It is important to know from the get-go that the current rate (i.e. the buying and selling “price point”) is determined by an independent, non-profit association called the World Gold Council, comprised of the world’s leading gold mining companies. The current standing price of gold is updated and reported every ten minutes, and this price point is mostly determined by a supply and demand module, influenced by leading economies from countries all around the world. Since gold is often used as a “hedge” again inflation (i.e. it provides a short of shield from fiat-based economic disparity, as per its worth continuing to stand even after a paper-money system collapses) it continues to remain in high demand. This matters when considering huge systems capable of investing in or selling off gigantic capacities of gold all at once, such as the central banking system, and thusly affecting the supply and demand systems all over the world. This is a common technique used to hike up the current interest rate, another common hedge tactic.
Clearly, rates are influenced by numerous factors, however if you plan on investing in gold, it is certainly a number worth investigating, understanding, and keeping up with.
Many individuals wonder what has caused the dramatic increase in gold and silver prices in recent years. There are a number of reasons that gold and silver prices have skyrocketed and many of these causes are still in play today and are responsible for the price fluctuations and increases seen. The demand for gold has increased for several reasons, and this increase makes gold more valuable on the market.
More countries than ever before around the globe are becoming industrialized. Global manufacturing is at an all time high, and the demand for electronics and other items that require certain precious metals including gold has gone up by quite a bit. In spite of the increased demand it is not possible to increase the gold production on a global scale relative to the higher demand. This means more people want to own gold but the amount of this metal has stayed about the same.
Today’s rates reflects economic uncertainty around the world. Many countries including the USA are facing tough economic times, and currency devalue is a very real threat in many global areas. This has caused investors to turn to gold instead of the Forex market or other investment opportunities because of the financial safety that gold represents. Stocks, bonds, and most other investments can lose all of their value but this is never the case with gold bullion.
Large financial institutions and central banks also play a role in the current price of gold on the markets. Most gold transactions are smaller trades, and this may cause some price fluctuations but will not normally cause drastic price changes. When large trades and amounts are performed this can have a big impact on the gold rate though, because of the sheer volume of the trades.
There are many reasons why values continue to rise and most of the financial experts do not feel that this price range will go down anytime soon. Even at the current price this metal is still a desirable investment for most people. Investors with smaller amounts of capital may simply choose to adjust the amount purchased rather than eliminating gold as an investment option due to the high current rate.