Can The Price Of Gold Be Influenced?

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The supply and demand can influence the price of gold. A big part of the gold that has been minted over the years still exists in the world and it can rise to the surface one day for the right amount of money. Various Central Banks save gold in the form of ingots. In the case of a national crisis they are used as a last resort.

Because of the high amount of gold stored above ground, the annual production can influence very little the prices of gold. The gold used for jewelry, industrial and dental production reaches about 2.000 tons of gold. Retail investors and exchange gold funds have annually about 500 tons of gold.

A very important role in the price of gold is played by the Central banks and the International Monetary Fund. A long time ago, dollars where fully convertible into gold. So both gold and dollars (paper money) were seen as money. Due to the fact that gold coins were heavy people preferred to carry paper money (dollars).

Because of the political insecurity and national crisis, people fear that they will lose all their assets and that the currencies will become worthless so they begin purchasing gold. And if the demand is high, the prices will also be high. India and China are important consumers especially because there is an emerging business population that is looking to invest in commodity assets.

The price of gold is usually quoted in dollars. It goes up when the dollar starts losing its power. Media is also an important factor that influences the price of gold. If gold investors start making a lot of profit, then their faces will appear on the front page of every newspaper. The public becomes aware of the phenomenon and is advised to invest in gold. This will obviously push the gold and mine share prices upward.


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Learn how to buy gold in times of recession by professionals.



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