As a commodity investor, especially in gold, it’s not enough to buy and hoard bars and billions of gold. What makes an excellent gold investor or trader is keeping up with gold trends and price charts to know the right time to sell and factors to consider when buying gold
The fluctuations in the price of gold data are highly beneficial to short-term gold traders who buy and trade gold occasionally and long-term investors who buy and hoard gold to sell later.
The best way to stay updated with the increase and decrease of gold at a particular time is by observing the gold price chart. This section will enlighten you about the gold price chart, the history of gold prices, and why you should start monitoring the gold price chart regularly.
What Is A Gold Price Chart?
A gold price chart is a chart that indicates the movements in the price of gold hourly, daily, weekly or yearly. It is commonly displayed with a line graph, bar chart, or a candlestick chart. The sole purpose of a gold price is to keep investors and traders updated on the price of gold and help them make fundamental analyses and technical analyses that will aid their trading decisions.
A gold price chart usually features a gold/silver ratio where traders can observe the price of silver also and make the best buying decisions after comparing the price of gold to silver. The chart can also be displayed in different weights of gold suitable for individual investors and large institutions.
The price of gold has seen its ups and downs throughout the years, and because of this, traders have a basis on which they can use to predict future prices. With the analysis of situations, prices, and the performance of gold from the past, expert traders and investors can spot understand why gold prices fluctuate and foresee future outcomes.
Below is a historical gold price chart that tells how the price of gold has fared throughout the years since the early 90s.
Historical Gold Price Chart
Factors That Influence The Price of Gold
Like other investment commodities, gold is also subject to its market value. The price of gold can vary based on the various factors, which include:
Supply & Demand
Supply and demand is the basic fundamental principle of economics.Traders and investors need to fully understand the supply and demand fundamentals of the gold market. When the demand for gold exceeds its supply, prices go higher, but prices drop if the supply rate surpasses the demand. For instance, the increased demand for gold rings, coins, bars, and other gold artifacts will raise the price of gold because suppliers are sure that collectors and investors will buy regardless.
The rate of mining activity can also influence the price of gold greatly. Gold is a natural element of nature that cannot be manufactured, making it a limited resource. The only method of acquiring gold is by mining it from the earth, so if the productivity of mining industries slows down, the supply of gold decreases which further increases the price of gold. If the mining rate increases, the supply grows, decreasing the price of gold.
High inflation tends to push the price of gold forward. When the value of goods and commodities increases, money holds less power, and the price of gold relatively increases, but when there is less or no inflation, the price of gold drops due to the high purchasing power of money.
Value of Dollar
A strong dollar increases the price of gold, and a weak dollar raises the price of gold. Gold serves as a way to store one’s wealth; hence people usually rush to change their money into gold when the rate of dollars drops. But, when the dollar grows stronger, investment in gold is rare, thereby lowering the price of gold.
Central Bank Diversification
When central banks choose to diversify their portfolio, they can add billions of gold to their asset portfolio by allocating more funds to gold. As a result, gold price increases, but when they lean toward other assets and dollars, the price of gold decreases.
Below is a table showing the performance of gold in the US.
Importance of Gold Price Chart
The gold price chart is beneficial for the following reasons:
- Examining gold price data
- Spotting trading patterns
- Assisting investors and traders in buying and selling decisions
- Finding the area of support and area of resistance to gold
- Analyze news and trends about gold
- Predict future outcomes or prices.
Frequently Asked Questions
What is the gold spot price?
Gold spot price can be said to be the current price gold is sold at right now. Gold spot price is in a constant state of flux making the current price unstable. In the US, gold spot price is around $1808 – $1809 which is liable to change the next second or minute. However, though in various currencies, the spot price of gold is the same everywhere.
Should I buy or sell gold now?
The current price of gold is close to the highest it has ever been; hence, the best time to sell gold as the price can’t go much higher than this. Due to the uncertain economy, the price of goods and other commodities is high, and investors are rushing to move their money to gold. All these are why it’s a good time to sell, as demand is high.
What are the factors that drive gold spot prices?
In the grand scheme, the potential factors that drive the spot price of gold is very extensive but, here is a list of some major ones:
- Currency Market
- Jewelry Demand
- Inflation or Deflation
- Investment Demand
- Equity Market
- Interest Rate & Monetary Policy