Rising Gold Prices - A summary

It is important to grasp the big picture of why gold is going up and the factors that are fueling its rise.

An Summary Since 1974

Four decades ago Chief executive Richard Nixon ended US dollar convertibility to gold, bringing to an end the core role of gold in world currency systems. Three years later Congress legalized the control of gold by US ALL citizens. Freed from the government-mandated price of 35 dollars per ounce, the buck and gold floated. Inside 1979 and 1980, investors' lack of confidence in the government's ability to restrict the expansion of the money supply come in panic buying of precious metals as a hedge against inflation. Precious metal prices soared, as well as in Jan 1980 the price of gold strike a record of $850 per ounce. During the four-year period from 1976 to 1980, the price of gold had increased by more than 750%.

In the early 1980s the US Federal Hold raised interest rates to limit money supply growth. This policy achieved its goal through 1982 interest rates were declining and the fear of inflation had subsided. Investment capital responded by moving into financial assets from commodities including precious metal, and the market jumped. Following the historic highs of January 1980, the price of gold meandered in the $300-$400 range until hitting a low of $256 in February 2001. Then the bull market for gold returned, and by November 2009 the price had pushed upward to $1, 140 - a rise of 445%. To some investors, this shows that history is reproducing itself and gold is heading beyond $2, 000 per ounce. To return to the 1980 high, when adjusted for pumpiing, the price would need to be over $2, 000 now.

Today's Precious metal Market

The price tag on gold is set by the Gold Fixing, which is also referred to as Gold Fix or London Gold Fixing. Twice a day by telephone, at 10: 30 GMT and 15: 00 GMT, 5 members of the London Gold Pool meet to settle contracts between members of the London bullion market. These settlements brokered by the Gold Repairing are widely recognized as the benchmark used to price gold and gold products throughout the world.

Let's examine some of the factors that influence the price of gold.

Gold Supply

There is an agency that tracks of all the gold on the planet. Gold Fields Mineral Providers Ltd (GFMS) is an independent, London-based consultancy and research company, dedicated to the study of the international gold and metallic markets. GFMS publishes the total annual Gold Survey, which features comprehensive analysis and statistics on gold source and demand for over 60 countries. GFMS estimates that above-ground gold stocks symbolize a total volume of approximately 160, 000 tonnes, of which over 60% has been mined since 1950. GFMS estimates that all the gold ever extracted would form a dice measuring 20 yards (19 meters) on each aspect.

The production of new gold does not generally come up with inflation. The aboveground gold stock increases at a reasonably constant rate of around 1. 7% each year. During the last 50 years the most significant twelve-monthly increase was 2 . 1% and the littlest increase was 1. 4%. This is less than the long-term historic rate of inflation, which is 4%.

The single biggest holder of gold on the planet is the United States authorities, with 8, 133. 5 tonnes. As of The fall of 2009 this gold provide was worth approximately $320 billion. Other top slots of gold include Germany, the International Monetary Fund (IMF), Italy, France, SPDR Gold Shares, China, Switzerland, Japan, and the Holland.To become more data click here سعرالذهب.

The US Dollar

The cost of gold is widely comprehended to inversely track the dollar. When the money falls the price of gold tends to increase. But there have been many cases when the price of gold do not maintain changes in the value of the dollar, or even ran counter to it.

Regarding example, when gold peaked in 1980, it shown a prevalent anxiety about inflation in the wake of the 1979 oil shock and a U. H. monetary policy that weren't getting credibility. The case for gold as a hedge against inflation was persuasive. But today, the price of oil is up significantly in currencies besides the dollar. Even measured in euros, it has returned to the February save-haven peak. The weakness of the US dollar alone cannot clarify the surge in price.

In early November, with the goal to support the Usa States' recovery from economic downturn, the US Federal Hold chose to maintain the substantial stimulus measures and keep down US interest rates for "an extended period. " With the Federal Reserve keeping rates low, a record US budget debt continuing to rise, and core banks around the globe diversifying away from the dollar, gold may continue being a very attractive choice. After all, the price tag on borrowing money to invest in gold is next to nothing.To get additional facts click the link سعرجرامالذهب.