subject: 4 Reasons Why Price Of Gold Constantly Rises [print this page] Gold has continued to enjoy being a prominent part of government's national treasuries, investor's portfolios and individual collections. At any given time, gold can be converted immediately to paper currency. As compared to prices of other commodities, gold prices have always been on an upward trend. Here are 4 reasons why price of gold constantly rises.
1.Inflation is constantly on the rise around the world and this is one of the major reasons for rising gold prices. We cannot attribute only the falling US dollar to gold price increase. There are other factors that influence the price of this yellow metal such as interest rate fluctuation and economic instability. If there is an increase in rate of inflation, people lose trust in their economies and this spurs them to reach out for the safest investment opportunity, namely gold.
2.Gold has been in high demand for ages and this has led to depletion in availability of this metal in the mines. Shortage of gold results in limited supply which in turn leads to rise in price. At least seventy five percent of gold in the world are sold as gold bullions, used for medicinal purposes and for making jewelry. Only the balance twenty-five percent goes towards investments.
3.Another reason for the constantly rising gold price is the effort by speculators and hedgers to make private profit from speculation. They start hoarding gold much before they actually need it foreseeing future gold price hike.
4.For the past two centuries, our world has seen a lot of economic and political turmoil including the deadliest of wars. These wars were fought at such a huge magnitude that it was not just enough collecting manpower. Nations had to pool in funds to keep the war going. In US, the great depression and ongoing wars forced certain tough decisions and this includes a ban on gold hoarding. During tough economic times when it became highly challenging for people to make ends meet, they preferred investing in gold nuggets rather than on the unstable paper currency.
Going by past trends and experience, it is clear that there is never be a reversal of gold price hikes. It is like a bull that continues moving forward at a great pace and can never be pulled back. Gold is always in demand which constantly keeps its price on the rise. Gold is an excellent investment opportunity if you indulge in informed trading.
