GOLD: USD/oz1,258.55 | EUR/gr38.35SILVER: USD/oz18.42 | EUR/gr0.5631

gold supply

Gold Supply

THE FACTORS THAT INFLUENCE THE PRICE OF GOLD

In recent times, the price of gold is determined mainly by supply and demand even if the presence of high metal stocks can have an important influence. In substance gold has become increasingly price sensitive to the behaviour of the Central Banks regarding reserves and this is such a historical turning point that price mechanisms from 1993 will in the near future have to take into account this factor and secondly, the development of demand in some populated countries such as China and India (Source Landi). The factors that influence the price of gold short term are: 

1) Exchange rate on dollar         
2) Inflation        
3) Yield of alternative investments        
4) Forward transactions              
5) Interest rates

 

Factors which influence the price of gold

Good indicators

Interest rates ( in particular real and American ones)

inflation (in particular American inflation expectations)

exchange rates(in particular of the dollar against the Mark and the Yen)

Indicators which show an interesting relationship

Equity market (in particular American one)

Price of petroleum

Price of other metals (in particular silver)

Economic and political stability

Indicators that are difficult to define

"official" transactions of the central banks (with increasingly marked influence in recent years)

net supply and demand

quantity of coins

economic growth

Source: Gold Fields Mineral Service

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