Gold is the an easiest and safest way to invest. Gold is easy to buy, require no upkeep and a great deal of wealth can be secured and stored. Physical Gold is not perishable and can be stored indefinitely, all you have to do is buy and keep it with you. The knock on effect being that the demand increases while supplies stay the same and thus the price increases.
Gold price is said to be inversely proportional to the US Dollar. If the dollar drops, gold tends to rise and vice versa. This happens with about 80% regularity. But that is not enough to predict the gold prices. Here are some principal factors that affect its price.
1. Investment Demand
2. Market Fundamental
3. Physical Market Conditions
Gold rates depends upon how these factors alter each other. Investors invest in gold due to dollar volatility and fall. When there is lack of confidence in the U.S economy, particularly banking, investors look to “safer bets” such as gold.
Any commodity's price is dependent upon supply and demand. When demand exceeds supply, price rises while prices drop when supply exceeds the demand. Gold's investment demand is growing much faster than its mined supply, so the only possible economic resolution for this deficit is higher prices to bring supply and demand back into balance. It’s been predicted that the future price of gold could rise to over $2000 dollars per ounce in the next few years. But how can we be sure of this and what factors need to be considered when making such a prediction.
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