One of the most popular questions that I have been asked nearly on a daily basis by many of my customers is whether now is the time to sell runescape gold or should you hold on to it a little while longer. In this article, I am going to discuss what influences the price of gold and how we can make a prediction about the future gold prices.
There are many factors that affect the spot price of gold. Nearly 95% of all trading in gold is done by day traders in the futures market which makes the price of gold dependent greatly on market sentiment and the commitment of traders to buy or to sell. Gold is a safe haven investment against inflation and economic uncertainty, this is the reason we have been seeing gold rising steadily in recent times. Since gold is traded in US currency, it is also directly influenced by changes in the exchange rate and a weaker US dollar usually means an increase in gold price. This is true because investors choose to sell US currency and buy gold with it in order to protect their assets as the US dollar continues to decline.
Supply and demand of physical gold also has a great influence on gold price. India and China are by far the biggest consumers of gold in the world, and the demand for jewelry and bullion at any given time will drive gold in either direction.
The people of India have a longstanding tradition to accumulate gold jewelry as a sign of wealth and as these countries become more powerful and prosper
runescape gold, the physical demand for gold would be higher. On the other hand, gold jewelry is often considered a luxury item and in unstable economic times the demand for physical gold does go down in western economies which may affect the price of gold.
The political and economic situation in the world also has an effect on the price of gold. During the recent recession when the interest rate dropped to near record low levels, the price of gold has been steadily on the rise. The reason is simple – when the rate drops investors pull money out of interest earning accounts
To hang on to cash and pour it into commodities like runescape gold
Tensions in the Middle East also have a direct effect on gold prices since gold is highly influenced by other commodities such as oil. War in Iraq and instability in Iran play a big part in the recent spike of gold prices. While this may be controversial, the sad truth is wars drive economies and while most governments would never admit to it, wars are very profitable and necessary to sustain economic activity and increase global wealth.
Now let’s get back to our original question – Is it time to sell gold? It is a complicated question, but I believe that the near term outlook is far higher prices for commodities and I think we have not reached the peak of gold prices. If you are an investor looking for investment opportunities then gold and other commodities should be on your list and one of my previous articles describes in detail the various ways to invest in gold. Many financial advisors would recommend to have at least 5% of your holdings in gold; I would even recommend at this time to increase gold to 15% of your portfolio and always keep your investments diversified to protect your assets. On the other hand, there are also good reasons to sell gold now especially if you are faced with financial hardship since prices have never been this high and it is worthwhile to consider selling gold to meet other financial obligations. If you invested in gold 5-10 years ago and made a decent profit, it may be worthwhile to sell in your specific situation. If you are on the verge of losing your house and still holding on to gold jewelry you inherited, I strongly encourage you to look into selling gold now.