GOLD PRICE

2022년 3월 9일

Hello!
In difficult times, investors become interested in gold, as has been done for a long time.
But what factors affect the price of gold?
Let's try to find out today.

Reserves of the Central Bank
Central banks hold fiat currency, but gold is also held in reserve.
Ever since the US went off the gold standard, central banks have been building up their gold holdings.
Overall, governments bought a total of 650 tons of gold in 2019, down from the 656 tons bought in 2018, and still at 50-year highs.

US dollar value
The strength of the dollar affects the price of gold.
If the dollar is strong, then the price of gold is usually low.
If the dollar is weak, the price of gold rises.
As a result, gold is often seen as a hedge against inflation.
As inflation rises, so does the price of gold.

Global demand for jewelry and industry
In 2019, jewelry accounted for more than half of the demand for gold, which was equal to 440 tons.
In addition, 7.5% of demand is related to technology and industry, where gold is used to make equipment.
These directions, their growth or decline, strongly influence the price of gold.

Welfare Protection
In times of crisis, gold has always been considered a "safe haven" for investors' funds.
Time passes and gold is still being used, and even the arrival of bitcoin has not changed the situation much.
When the expected or actual yields of bonds, stocks and real estate fall, interest in investing in gold may increase, causing its price to rise.
In addition, it is believed that gold provides protection during periods of political instability.

Investment demand
In addition to the central bank, gold is owned by exchange-traded funds that issue shares available for purchase and sale to investors.
SPDR Gold Trust (GLD) is the largest holding over 1,078 tons of gold in March 2021. In general, gold purchases from various investment vehicles in 2019 amounted to 1271.7 tons, which is more than 29%. of the total demand for gold.

Gold production
Major players in global gold mining include China, South Africa, the US, Australia, Russia and Peru.
The production of gold in the world affects the price of gold, which is another example of supply and demand being met.
The mine's gold production was approximately 3,260 tons in 2018, up from 2,500 in 2010.
Every year it is more and more difficult to mine gold, and this also affects the price.

conclusions
Gold, after several centuries, is still used not only as jewelry, but also for investment.
Every year, the price of production is growing, banks are accumulating gold in their reserves, crises and other factors are raising the price of gold.
Using the data, you can predict the rise or fall of prices.
In any case, nothing more expensive than information has yet been invented.
Good luck!

Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩