3 Factors that Affect the Price of Gold in the Market

Several funds have been selling their gold during this time of global crises to compensate for margins and offset losses. Because of this, gold prices have dropped to $ 1, 520.80 per ounce as of the second week of March. But this shouldn't alarm you. Instead, you should take this as an opportunity to buy gold West Palm Beach, especially because the gold-positive circumstances that led to gold's surge are not over. Here we’ll talk about 3 factors that affect gold prices.

What are 3 Factors that Affect Gold Prices?

Monetary Policy

Monetary policy has the biggest influence on gold prices. It is an economic policy that aims to carry out macroeconomic goals like low inflation, financial stability, high economic growth, and low unemployment.The idea behind this is that when interest rates are low, bonds and CDs are earning returns that are below the national inflation rate. This results in nominal gains but real dollar losses. During this situation, gold becomes a viable option for investment, because the opportunity cost of giving up interest-based assets is low.

Geopolitical Uncertainty

Geopolitical uncertainties like Brexit, decoupling of the US-Chinese tech sector, COVID-19, and climate change can push gold prices to rise. During times of uncertainty, the economy is unstable, so the stock prices go down. Because of this, investors turn to gold as a haven to protect their investments and cover for their losses.They also see it as an investment moving forward, especially that gold prices have reached a value of $ 1,722.50 as of today. As no one knows when the COVID-19 quarantine will end, it’s best to buy gold today.

Inflation and Currency Movement

Inflation and a falling U.S. dollar can push gold prices higher. Inflation is a sign of economic growth and expansion, which means that the Federal Reserve has to expand the country's money supply. Because of this, the value of each existing monetary note in circulation decreases, making it pricier to purchase assets that are considered a store of value, like gold.

Ready to Buy Gold West Palm Beach?

Consider this COVID-19 pandemic as an opportunity to buy gold West Palm Beach, especially since no one knows when this pandemic will end. At Endeavor Metals Group, we offer precious metals of all kinds at a reasonable price. Reach out to us today to start investing!