Make Money From Home: 6 Reasons Why Gold Price is Going Up

Looking for reasons why gold prices are skyrocketing?

Do you want to buy gold?

Ever wondered about the price of gold?

Relax, I have gathered 6 reasons why the price of gold is climbing.

1. Increase in gold mining difficulty

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It has become very difficult to mine gold.

Invesopedia backs this statement by saying

“Major players in worldwide gold mining include China, South Africa, the United States, Australia, Russia, and Peru. The world’s gold production affects the price of gold, another example of supply meeting demand. Gold mine production was roughly 3,500 tonnes in 2018, up from 2,400 in 2010.

However, despite the increase over the ten-year span, gold mining production has not changed significantly since 2016. One reason is that the “easy gold” has already been mined; miners now have to dig deeper to access quality gold reserves. The fact that gold is more challenging to access raises additional problems: miners are exposed to additional hazards, and the environmental impact is heightened. In short, it costs more to get less gold. These add to the costs of gold mine production, sometimes resulting in higher gold prices.”

The increase in difficulty of mining led to the increase of gold mining.

2. Gold stocks are at an all-time high

Gold stocks have climbed so gold price has climbed too.

Increased demand for gold, increased price.

While, gold has not increased, it has become harder to get, the stocks have been climbing.

Here’s what CCN says “The price of gold ended the week on a high note Friday, as seasonal influences and political headlines pushed investors into the traditional haven asset. Somewhat surprisingly, gold is rallying while stocks are at all-time highs, sending a strong signal that investors are becoming weary of the decade-long bull market.”

The stocks have climbed and so has gold.

3. Gold is a safe haven

During times like thee, gold has been looked at as a safe haven.

Stocks have dropped during these times of uncertainty.

When stocks drop, people resort to gold.

Here’s what Marketplace.org reports:

“This all spells uncertainty for the global economy. South Korea and Italy both saw stock markets dip about 4% Monday, and Asian currencies and the price of crude oil have also fallen. The Dow Jones Industrial Average opened down 3.4%, sliding more than 900 points.

At the same time, spot gold climbed 2% to $1,675.76 per ounce after hitting $1,688.66, its highest level since January 2013. U.S. gold futures were up 1.7% to $1,676.40.

So what is it about times of economic uncertainty that drive up the price of gold?

Let’s break it down: essentially, gold has long been considered a safe-haven investment. “Safe havens are sought by investors to limit their exposure to losses in the event of market downturns,” Investopedia explains. Of course, fluctuations — both negative and positive — in markets occur frequently for short periods of time. It’s during expected extended plunges that we see a shift to gold.”

Gold is highly sought after in times like these, so prices increase.

4. Inflation

The weaker the U.S. dollar, the high prices go up.

Gold supply has not increased, the dollar value has decreased, making gold prices skyrocket.

According to Investopedia, “The price of gold is generally inversely related to the value of the United States dollar because the metal is dollar-denominated. All else being equal, a stronger U.S. dollar tends to keep the price of gold lower and more controlled, while a weaker U.S. dollar is likely to drive the price of gold higher through increasing demand (because more gold can be purchased when the dollar is weaker).

As a result, gold is often seen as a hedge against inflation. Inflation is when prices rise, and by the same token prices rise as the value of the dollar falls. As inflation ratchets up, so too does the price of gold.”

Inflation highly affects gold prices.

5. Jewelry Demand

People all over the world love gold jewelry.

You probably have some gold earrings or necklaces.

Jewelry demand has increased tremendously.

More and more people want flashy jewelry so the prices rose.

“Investopedia supports this by saying “In 2019, jewelry accounted for approximately half of gold demand, which totaled more than 4,400 tonnes, according to the World Gold Council. India, China, and the United States are large consumers of gold for jewelry in terms of volume. Another 7.5% of demand is attributed to technology and industrial uses for gold, where it is used in the manufacturing of medical devices like stents and precision electronics like GPS units. Therefore, gold prices can be affected by the basic theory of supply and demand; as demand for consumer goods such as jewelry and electronics increases, the cost of gold can rise.”

The more people want gold jewelry, the higher the cost is.

6. Central banks are accumulating gold

More banks in the world want gold.

They are searching for gold as a safe haven as I previously said.

Many countries like China and India want gold for their banks.

Here’s what Global Bullion Suppliers say

“Look overseas and another ripple effect emerges: the rise of Asian economies. In 2016, China’s economy grew by 6.7 percent, and it’s expected to grow again by 6.8 percent in 2017. India’s economic outlook is similarly optimistic. The relationship between the boom in Asian countries and gold’s price is very tangible: As reports note, in the early 1990s, before the Chinese and Indian economies ramped up development, their total share of world gold demand was about 25%. Last year, China and India accounted for more than 50% of the world’s total gold demand. China especially has a voracious appetite for gold. Chinese banks see it as a store of value and aims to diversify its official reserves.”

The more they accumulate gold, the higher the gold price.