Since the global supply of investment-quality gold increases by only about two percent annually, the most significant influence on the rising and falling of the gold market spot price is due to global demand for the metal. Experienced investors know that the price of gold is inversely correlated with a weak U.S. dollar and a struggling national economy. Investors with short and long-term hopes of success in the gold market should keep a keen eye on the gold market spot price fluctuations, because movement of the market in response to various circumstances can give you an insider’s perspective on what really influences gold prices.
As the dollar index falls, gold and other commodities that are priced in dollars tend to rise. The exception occurs when investors believe the dollar’s weakening is only temporary, in which case investors sell gold and the selling overrides the profit that gold could see due to the weakening dollar. The opposite is also true, because growth of the dollar’s value can sometimes be seen as an anomaly and nothing more.
Demand for safe-haven assets like gold and silver rises and falls by the second, as does the market spot price for these metals. When consumer confidence is low, more individuals buy gold since it is a privately-held hard asset that can be used for goods and services in a financial emergency. You might have noticed that when our economy is looking up, gold declines in value. This trend generally holds true, so if our economy gets worse then gold may continue to rise.
If you have questions about how the gold spot price fluctuates, or if you think today’s prices make it a good time to buy gold, call the Certified Gold Exchange at (800) 300-0715 and discover why we have been known as “America’s Trusted Source For Gold” since 1992.
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