Guest Column: Jason The Gemologist, 5th Generation of Venus Jewelers, who specializes in Diamonds, Engagement Rings and Custom Designs, discusses what determines the price of gold
Did you know that the price of Gold is rising and on the move? Here are three factors as to what determines and drives the price of Gold:
#1.) The Value of the US Dollar:
-The price of gold and the US Dollar are inversely related because gold metal is dollar-denominated, making it easier to buy when the dollar is weaker. Strong US Dollar = Lower Price of Gold. Weakened US Dollar = Higher Price of Gold.
#2.) Central Bank Reserves:
- Central Banks not only hold their reserves in paper currency, but also in gold. As they try to diversify their monetary reserves, and steer away from printing paper currency, they invest into gold, which in turn, drives up the price of gold.
#3.) Gold Production and Mining:
- Since 2016, gold mining has leveled off, causing miners to dig deeper to access quality gold reserves. In short, it costs more to get less gold, adding to the cost of gold production, resulting in higher gold prices.
The bottom line is that the demand for gold, the amount of gold in the central bank reserves, the value of the U.S. dollar, and the gold production all help determine the price of Gold
Right now is a great time to sell your unwanted and broken gold since the price of gold is at an all-time high in the last decade. I hope you guys learned something new!
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