Surging Gold Prices: What’s the Cause?

Indigo Precious Metals deals with the trade, supply, and delivery of various precious metals in Europe and Asia. We have offices in the UK and in Singapore and Malaysia, where we deliver the latest investment news and live pricing.

Gold is one of the highest sellers at any given time. Gold is a highly versatile element and has been around for thousands of years. We trade with it and mint it to make currency. We use it to make jewelry and countless other exclusive products. Currently worth around $4,077 per 100g, we can’t help ourselves from preserving this precious yellow metal. In some dire cases, gold has increased in value beyond even platinum, a much rarer metal. Events like these are rare and troubling, often closely linked to times of crisis like political unrest or natural disasters.

Gold is, above all, the most sought-after and highly regarded of the precious metals. It isn’t even the rarest, yet there’s something about it that makes it unique. Ever since the days of the Gold Rush, and before that ancient civilizations like the Egyptians or Aztecs, gold has held our minds captive. Today is no different, with crises like Brexit and America’s current political state, gold prices have risen drastically. Here we look at the factors that influence surging gold prices. If you want to know more, visit our website at https://www.indigopreciousmetals.com/.

Surging Gold Prices Reflect Falling Interest Rates

Gold always tends to climb as interest rates decrease. It is rare for gold to make dramatic surges out of the blue. As such, investors use it as a safe place to tie up their funds when bonds and savings returns are low. Over the last few months, the Brexit crisis in Britain has significantly affected interest rates, reducing them to below 0.5pc. Gold always reflects the times in which we find ourselves and political turmoil and recessions are some of the worst offenders. However, it isn’t all bad news. Of all the metals, gold is one of the most reliable. In fact, you can expect it to behave differently following a hike in interest rates and has performed well in the past under the same conditions. Banks often increase rates due to the liquidity involved and the necessity for growth. All these factors push people toward gold when things simmer down.

The US Dollar

One of gold’s biggest rivals is, in fact, the US dollar. There is an inverse correlation between the two. Where value for one falls, it rises for the other. When demand for gold increases, with banks rushing to invest, the value of the dollar has likely depreciated. As this happens, you can expect the precious yellow metal to become a lot rarer and harder to come by. On the other hand, as the dollar price increases, this can act as an updraft on which to drive up gold’s spot price. It’s difficult to tell when this may happen, but you can expect a boost in returns for investors whose interests are in sterling.

At Indigo Precious Metals, we can help you make sound investments with guaranteed returns. If you need advice on how to make the most of your monetary assets, you have come to the right place.