Spot Price of Gold

NOTE: The price of gold is gathered from spot gold trading reports in New York. Gold buyers and traders can use this for informational purposes, and in order to track prices by the minute.

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Latest Gold News:

Our news feed is gathered from Google News with a filter of “price of gold” as the query word.

Our gold charts and news are gathered from reputable 3rd parties, and while we believe in the accuracy of the trading information presented, we cannot guarantee it. We will not be responsible for the accuracy of gold prices presented, and nothing herein should be construed as an official live market price, nor should it be used solely to make a purchase in physical gold, gold ETF’s, gold securities, or any other precious metals or derivatives. You should always check with your broker or financial adviser prior to making a gold purchase.

Another great resource for staying up to date on gold prices is GoldPrice.org.

 

Some Factors That Determine The Spot Price Of Gold

While there are many reasons why gold may gradually (or suddenly) rise or fall in value, most of these reasons can be traced back to the three primary causes listed below.

1. Supply

One reason why gold has always been considered valuable is the fact that it cannot be created or manufactured. It has to be mined from the earth, which has produced only a limited amount of this precious metal.

Even so, gold is more readily available at some times than others. Historical documents show that at the time of the gold rush, the value and price of gold was much lower than it is today. In fact, during Australia’s gold rush, gold sold at a mere $6.00 per ounce. Naturally, when the gold rush was over, gold dramatically rose in value.

The dawn of the industrial age also helped to increase the supply of gold. When men had to mine gold with picks and shovels, the amount of gold available at any given time was very limited. However, the invention of dredgers made it possible to profitably mine very small quantities of gold from a large area. These machines naturally increased the supply of gold, helping to keep prices low.

While it is highly unlikely that the gold rushes of the past will repeat themselves, it is a known fact that there is an extremely large quantity of gold in the Earth’s core. In fact, the amount of gold to be found hidden deep in the earth would be enough to cover the entire surface of the world in one and a half feet of gold. That is a significant difference to the amount of currently available gold. In fact, all of the gold ever mined in human history can only fit into a 10 story building.

 

2. Demand

The more people want a particular product, the more valuable that product will become. Gold is no exception to this rule.

There are many reasons why demand for gold rises and falls. In times past, people bought gold when their country’s economy was unstable for whatever reason; they then sold the gold when the country regained stability. However, today’s globalized economy has led people to look at the world’s state of affairs rather than just those of their home country.

The economic standing of people in a particular country can also have a large bearing on the value of gold. In many nations, a husband to be was (and still is) expected to furnish his future bride with large quantities of gold jewelry. The wealthier a man is, the more gold jewelry he is expected to purchase for his wife. However, a large, thriving middle class also means that there are many people who have the means to purchase gold, and thus, the demand for gold rises. In 2013 the gold market saw 21% growth in demand from consumers, driven in large part by India and China.

 

Although the gold market is affected by consumers, corporations make up a large part of demand as well. Any company that manufactures electronic products needs gold in order to create these products. Gold acts as a conductor and is commonly used in cell phones, calculators, computers, laptops, netbooks, PDAs and GPS systems. NASA also uses gold for every single spacecraft that it creates. These industries have greatly increased demand for gold and will likely continue to do so in the near future.

It is also interesting to note that the use of gold in the above mentioned products is likely to have a permanent effect on the supply of gold. As most electronic devices are not recycled, the gold that is used in them is lost, never to be retrieved. While each electronic item only uses a very small quantity of gold, there are literally billions of electronic devices in the world. Therefore, the failure to recycle electronics means that the amount of gold available for purchase is gradually decreasing.

 

3. Politics

Politics have a large bearing on the gold prices. As outlined above, economic instability drives people to buy gold; as demand rises, so does the price of gold. However, there are other factors at work as well.

In the middle ages, for example, European countries decided to use silver as their currency of choice rather than gold. At this time, the price of gold in these countries naturally declined as silver gained in popularity. On the other hand, when the United States and various other countries left the gold standard behind and allowed their currencies to float, panicked investors rushed to buy gold, thus spiking a dramatic rise in gold prices in the Western world.

Globalization has made politics related to gold prices yet more complicated. Given the fact that not all countries are on friendly terms with other nations, it is understandable that countries would want a global reserve currency that is not connected to any one particular country. Gold could fit this bill very well; if it came to be used in this capacity, the value of gold would undoubtedly skyrocket in a very short amount of time. As an example, in China, private ownership of gold was prohibited until 2002. Since then it has been allowed, but even more so, in 2009 the Chinese government resorted to actually encouraging citizens to purchase gold. The catch is that once it is owned, it cannot be sold outside of the country. One can only assume that this is to help the nation diversify away from a devaluing dollar.

Gold is a precious metal with a fascinating history; what is more, the chances are high that it will have a fascinating future as well. Its intrinsic value, along with the fact that it is used for many modern appliances, means that it will always be considered valuable by people from all lifestyles. However, the above-mentioned factors always have, and always will, determine just how valuable gold is at any given time. Supply, demand and national and international politics cause gold to rise and fall in value over the years, and will continue to do so. Anyone who is interested in predicting the future price of gold will want to consider these factors.

Further recommended gold-related reading on our site:

The IMF and its Effect on the Price of Gold

Our Reviews of the Leading Gold Investment Companies Online