Last updated on May 2nd, 2024 at 03:35 pm
Last Updated on May 2, 2024 Posted by Colonial Acres Coins
The price of gold is something that varies in incredible intervals and it is often difficult to predict what the future holds for investors. If you’re a coin collector and are particularly fond of silver and gold Canadian coin currency, this is an issue that concerns you. It can be a difficult task to invest in gold or silver, especially if you have no experience. Here are some factors known to influence gold and silver prices:
Uncertainty
This is a pretty broad factor that typically includes political instability and/or uncertainty. The stock market is simply yearning for certainty and the absence of it is one of the biggest enemies of gold prices. Examples of such factors that can create uncertainty on the market range from civil unrest to who will become the next president of the United States. Uncertainty is not a quantifiable statistic and is a completely psychological factor that depends and varies from one investor to the next.
Inflation
Inflation can be described as the rising price of goods and services. Higher levels of inflation correlate to higher prices of gold on the market; on the other hand, lower levels of inflation weigh on gold as well. As a rule, inflation is a typical sign of economic expansion and growth. When there’s a growth in an economy, the central bank will often expand the money supply. This will, in turn, dilute the value of each existing monetary note in circulation. The end result is that it is more expensive to buy assets (such as gold) that are a perceived to be more valuable.
Currency Movements
One of the most impactful currencies in terms of gold is the U.S. dollar, since the price of gold is dollar-denominated. Simply put, gold prices are pushed higher by a falling U.S. dollar because other commodities and currencies around the world increase when the dollar falls. The opposite also applies to an increasing USD value.
Economic Data
Another factor that can influence the price of gold is U.S. economic data (once again – U.S., because gold is dollar-denominated). Data that has to do with GDP growth, manufacturing, wages, job reports and other types of economic data influence the central bank’s (Federal Reserve) decisions about the nation’s monetary policy. To simplify, a stronger U.S. economy pushes gold prices lower and vise versa.
Supply & Demand
The physical prices of gold can also be influenced by the supply and demand economics, despite this being an often overlooked point. This is typical of many goods and services: increased demand with lower supply drives prices higher. So, the higher the demand for gold, the higher the price is likely to go.
Interested in Investing in Gold? Get in Touch with Colonial Acres
Colonial Acres Coins is home to countless rare and valuable Canadian coin currency and paper money pieces. But, Colonial Acres is also an excellent choice if you’re aiming to become an investor in gold, but have no experience and don’t know where to start. Colonial is a certified gold and silver bullion dealer and has a stellar reputation that goes back more than two decades. Get in touch with Colonial Acres today and invest in gold coins and bullion safely with the help of expert advice.
