Wednesday, August 15, 2012

Factors affecting Gold Price

http://www.premsansar.com
Contrary to common beliefs gold prices move up and down just like any other commodity. Since Gold can act as an inflation hedge and a safe escapement during times of economic uncertainties and slowdowns it’s crucial to understand the factors affecting gold prices so that you don’t take wrong investing decisions.

Gold Prices and the US dollar

Gold is quotes in US dollar, this means that those buying and selling Gold must do it in US dollar and therefore when the US dollar goes up it means that buying dollar has became more expensive and this in turn makes buying gold more expensive. That’s why gold goes down when the US dollar goes up and vice versa.

Gold prices and Oil

When Oil goes up the global economy slows down which threatens corporate profits and makes gold a higher yielding investment. Thus when Oil goes up gold prices go up and vice versa.