Is The Gold Price Will Increase or Decrease in Future?

Do you know whether the gold price will increase or decrease in the future? Well, gold is a precious metal that is loved and hunted by humans. So that the price always increases. That said, gold is a rock that does not come from the earth. Regardless of whether the news is true or not, gold is a form of investment that is preferred by many people than investing in dollars.

It is true that the price of gold will tend to rise, but it will also fall. Actually, what causes the price of gold to rise and fall?

The Factors to Predict Gold Prices

1. Uncontrolled Inflation Rate

Gold prices are driven by a combination of supply, demand, and investor behavior. Although it seems simple enough, the factors work together. For example, many investors view gold as an inflation hedge. This made sense because paper money could decline in value, while gold was relatively constant.

Incidentally, gold mining does not add much to the supply from year to year. Thus, people prefer to secure their assets in the form of gold rather than money because their value is not reduced by inflation.

2. Total demand and supply

When the great recession hit, the price of gold rose. Gold has a positive price elasticity. This means that the more people buy gold, the price increases, in line with demand. If investors start buying gold in droves, the price goes up regardless of the shape of the economy or what the monetary policy is.

3. Jewelry and Industry

It also includes as a factor to predict whether gold prices will increase or decrease in the future. Gold is not only valuable for investment, but gold is also often used for jewelry and industry. More than half of the demand for gold refers to jewelry. Generally, the demand comes from China, the United States, India, and several countries with the most demand. For example, like India, gold is still currency, wealth, and an important gift.

Apart from jewelry, 12% of the demand for gold is used in industry. For example, it is used for electronic devices, computers, medical devices, and others.

3. United States Dollar Exchange Rates

Domestic gold price refers to the international gold price which is converted from United States (US) dollars into local currency currency. Therefore, the price of gold is greatly influenced by the movement of the local currency against the US dollar. If the local currency exchange rate against the US dollar weakens, the local gold price will strengthen or be high. Conversely, if the local currency strengthens, the local gold price tends to fall.

4. Another factor

Apart from the factors already mentioned above, there are several other factors that influence the rise and fall of gold prices, such as political conditions, world economic conditions, and world crude oil prices. These three things can make gold prices go up or down significantly.

Well, even so, that is, gold can go up or down, in general, the increase in gold is certain, even though it is gradual, while the decline in the price of gold is also insignificant. Therefore, the price of gold will always be stable. So, that gold price will increase or decrease in the future depends on those factors above. Do you understand the factors that affect the ups and downs of gold prices? Are you ready to invest in gold yourself?