What Moves the Price of Gold? A Look at Where We Are Today

When it comes to investing, precious metals like gold have long been a standard choice for many.

If you’re curious about the gold price and what contributes to its fluctuations, there are several reasons why those prices can change.

Read on to learn more about what causes the price of gold to fluctuate so you can stay on top of your game.

The Gold Price and Central Banks

Central banks all over the world have paper currency and gold stored in their reserves. As these banks move away from paper currency and toward gold, the price tends to rise.

In fact, many countries across the globe use gold as their primary reserves. Ever since the United States abandoned the gold standard, nations like Russia and Turkey have become some of the largest buyers of this precious metal. When the central banks look toward gold as their main source of currency, you can expect the price per gram and ounce to increase.

The Value of the US Dollar and Gold

Since gold is dollar-denominated, the cost of gold is often closely related to the value of the United States dollar. While prices can certainly fluctuate, a good rule of thumb is that the stronger the dollar, the lower the price of gold.

A weaker dollar tends to drive the cost of gold higher since demand will also rise. Another reason for this is that higher quantities of gold can be bought when the dollar is weaker.

Many people choose to use gold as a hedge against inflation. When the cost of goods and services rises, inflation rises, and the cost of gold rises, too. Before you invest in gold, it’s vital that you’re aware of what to know before you take the plunge.

Gold Today

While central banks and the value of the US dollar have a significant impact on gold prices, so do world events. As with any investment, gold will naturally fluctuate over time.

With the COVID-19 pandemic in full swing, the global economy has taken a major hit. This has caused the price of gold to fluctuate wildly, and it has seen major dips and upticks as the headlines change.

If you’re planning to invest in gold, it’s a good idea to consistently check the daily spot price. You can do a quick search for “what is the price of gold today” so you can keep abreast of the latest changes. Keeping an eye on the market is the best way to make a smart investment in gold.

Make a Money Move

If you’re looking to hedge against inflation or diversify your portfolio, keeping an eye on the gold price is a smart way to go. Remember that gold and other precious metals can change daily, so it’s best to monitor the costs in order to make your money work for you.

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