Starting the year out under $1100 per Troy ounce, gold has worked its way up to $1273.80 per ounce as of May 16, 2016. Used as a guideline of value for currencies around the world, the price of gold fluctuates due to a number of variables.
In times of geopolitical, economic or other global crises, gold is viewed as a source of financial safety. When people are worried that the value of their paper currencies will decline, they often turn to gold for its endurance in the face of chaotic situations. It is seen as a low-risk investment that has typically withstood the tests of time.
With the U.S. dollar still considered the world’s dominant reserve currency, the cycle of gold value reflects an inverse relationship with the state of the dollar. When the dollar is healthy, the prices of gold diminish – when the dollar is weak, the prices of gold increase. If world central banks experience problems, deficits or other uncertainties, gold instantly becomes a “safer” and more desirable option. Market manipulation in the form of interest rate adjustments also drive the value of gold up or down. Decreasing interest rates enhance gold value by presenting a lower opportunity cost to holding gold when compared to other investments, and vice versa.
Although gold has been mined for over 5,000 years, if you put all of the gold in the world together, you would fill up about three-and-a half Olympic-sized swimming pools. That’s not much, when compared to many millions of tons of other metals such as copper, iron and so forth. The sheer scarcity of gold will ensure that this precious metal remains precious for any foreseeable future, which brings us to supply and demand. Relative to the finite supply, the demand is as varied as it is high. Electronics and computers utilize gold in various types of circuitry and the medical industry employs it in certain cutting-edge technologies. Over half of the world’s demand for gold comes from the jewelry sector. Coin and gold bullion satisfies collectors and investors alike. Whether currency, a display of wealth or a hedge against troubled times, gold has maintained its appeal throughout history, and there is no indication that is going to change any time soon.
Metro Pawn & Gun is a great destination for any of your gold needs. We have jewelry, coins and bullion, and are in tune with the gold markets and prices. If you need to sell or want to buy, we can help you with fair prices and great selection!
Contact Us for More Information