Gold is used for a variety of purposes, including the production of medical and aircraft equipment. However, most people are only interested in the investment opportunity that gold represents. While gold is much more stable than stocks, there are certain factors that cause the price of gold to rise and fall. These factors include:
Gold is mined throughout the world, with miners hard at work in multiple countries across several continents. While the United States, China, and the Russian Federation are major forces in gold mining, the process is becoming more difficult. This means that although more gold has been coming in as of late, the gold that is mined is more valuable because of the extra effort needed to bring it to the surface. Miners that supply the gold are taking greater risks and the environment is being affected at a greater level, causing the gold to be seen as more valuable.
Another factor that impacts the value of gold is the demand for the products that it is used to make. This precious metal is used in the production of medical instruments and electronics as well as jewelry. Jewelers compose the majority of the demand for gold, especially those in China, India, and the United States. Thus, gold increases in value when more people decide to buy jewelry.
Value of Currency
Gold increases in value when the dollar decreases. The opposite is true as well. This happens because people typically invest in the dollar rather than gold when the dollar is valuable. However, the dipping in value of the dollar causes people to put their trust in gold coins and gold funds instead. In this way, the economy plays an important role in influencing the value of gold.
For more information about the fundamental factors that influence the value of gold, call Coins of the Realm at (301) 340-1640. We are your Gaithersburg coin and gold dealer, and we can help you buy and sell gold coins. If you would like to know more about our services, visit our website or stop in and meet with one of our gold dealers today.