Rising Gold Prices - An Overview

This is important because gold is going up and understand the big picture of the factors that are fueling its growth.

Since 1974 an overview

In 1971, President Richard Nixon ended the gold convertibility of U.S. dollars, an end to the central role of gold in the world monetary system to bring. Three years later Congress of American citizens, legal ownership of gold. Essentially free of government price per ounce $ 35, floated the dollar and gold. 1979 and 1980, the government expanded the money supply to limit the potential loss of confidence of investors as a hedge against inflation as a result of panic in the purchase of precious metals. Gold prices soared, and January 1980 the price of gold hit a record $ 850 per ounce. Over a period of four years from 1976 to 1980 the gold price had risen over 750%.

In the 1980s the U.S. Federal Reserve raised interest rates to restrict money supply growth. The policy achieved its objectives by 1982 and interest rates were declining and inflation fears had subsided. Investment in financial assets to commodities including gold, have responded by going on the market soared. January 1980, meandered gold price at $ 300 after historic highs - $ 400 range in February 2001 until hitting a low of $ 256. Then the bull market in gold, returned and November 2009 had pushed the price to $ 1,140 - an increase of 445%. For some investors, it shows that history is repeating itself and beyond $ 2,000 per ounce of gold has reached. To return to the top in 1980, when adjusted for inflation, prices will need more than $ 2,000 now.

Today Gold Market

Gold gold fixing price, whichever Gold Fix London Gold Fixing or as determined by what is known. Twice by telephone and 10:30 GMT 15:00 GMT, five members of the London Gold Pool, the day the London bullion market settlement agreement between the members meet. Mediation of the Gold Fixing settlements widely throughout the world price of gold and the gold standard for products used are identified.

Some of the factors that influence the price of gold investigate.

Gold supply

There is an agency that tracks all the gold in the world. Gold Fields Mineral Services Ltd (GFMS) an independent, London-based consulting and research company in international markets, gold and silver is dedicated to the study. GFMS annual gold survey, the comprehensive analysis and statistics on gold supply and demand features over sixty countries publishes. GFMS estimate that above-ground gold stock of about 160,000 tons, of which 60% has been mined since 1950 represent the total amount. GFMS estimates that all the gold ever mined on each side measuring 20 cubic yards (19 meters) will form.

New Gold usually does not keep pace with inflation. 1.7% per year around the aboveground gold stock at a fairly steady rate increases. During the past 50 years, the largest annual increase was 2.1% and 1.4% increase was small. The long-term historical rate of inflation, which is less than 4%.

The world's largest holder of gold with the United States government is 8133.5 tons. November 2009 as the supply of gold was worth about 330 billion dollars. Other top holders of gold Germany, International Monetary Fund (IMF), Italy, France, SPDR Gold Shares, China, Switzerland, Japan, and the Netherlands are included.

U.S. $

The price of gold is widely considered to be inversely track dollar. Dollar falls the gold price increases. But in many cases with changes in the price of gold did not keep the dollar price, or ran counter to it has been.

For example, when gold peaked in 1980, the 1979 oil shock and a U.S. monetary policy lacks credibility in view of the prevalent fears of an inflation reflected. Gold as a hedge against inflation for the case was persuasive. But today the price of oil in currencies other than dollars are up significantly. Even measured in euros, for February to save it to Paradise has returned to peak. U.S. dollar weakness alone can not explain the price increase.



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